# US Tax Return 2014



## QueenBcp (Dec 1, 2013)

Hi All, I thought there was a tax forum somewhere on here, but I can't find it - so my apologies if this is in the wrong place. I'm struggling in figuring out how to approach my US taxes, as this is my first year in the UK + I also got married this year in the US. Oh fun tax changes!

I know I need to submit a return, but I'm going to get an extension since our tax time frames don't match up. I arrived here at the end of May 2013, started working for myself in July 2013, and secured a full time job in August 2013. However, I also worked in the US from January to the first week in May 2013. 

There seem to be several forms to fill out for an extension (4868 or the 2555) and a little bit tricky wording in Publication 54 about extensions: To use this automatic
2-month extension, you must attach a statement to your return explaining which of the two situations listed earlier qualified you for the extension. (um, attach it when? I can't send the return in by the April 15 due date).

Plus there is an extension to deal with bona fide residency... Whew. What?

Any words of advice from people dealing with this either currently or who worked through it in previous years?

Thanks!


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## BBCWatcher (Dec 28, 2012)

Getting an extension is simple: send IRS Form 4868 now, immediately, so that it arrives at the IRS by April 15. (Standard Royal Mail airmail is still fine, as long as you don't wait too long. Any time this week should work.) That'll extend your filing deadline to October 15, 2015 (also the date of receipt of your tax return at the IRS since you're now using a foreign postal service).

A filing extension does not extend your deadline to pay any tax still owed for tax year 2014. If you're expecting a refund, no problem, sit tight. If you think you might owe some remaining tax, take your best guess at how much and send that in now so it gets to the IRS by April 15. That'll help you avoid paying interest on any late tax. If you overpay you'll get it back as a refund when you file your tax return.

You have to file FinCEN Form 114 (if you're required to file it) by June 30. There's no extension available for that form, but it's an easy form that you file electronically. Don't wait until the last minute, though.

....OK, with the filing extension out of the way, by the time June rolls around you will have been physically outside the United States for a full year. That'll then make you eligible to take the Foreign Earned Income Exclusion (FEIE), IRS Form 2555, based on passing the physical presence test. You would be able to take the FEIE only on -- no surprise -- your foreign earned income. That is, in your case, your U.K. employment income from July to December, 2014. (I assume 2013 is a typo. We're now in 2015, and I assume you meant 2014.) You are not _required_ to take the FEIE -- you can alternatively take the Foreign Tax Credit (IRS Form 1116) on that foreign earned income. You may be taking the FTC regardless, on other income, if you paid U.K. tax on other income. You cannot take both the FEIE and the FTC on the _same_ income (foreign earned income).

Please note that unless you contributed to U.K. National Insurance (U.K.'s Social Security) on that income, your self-employment income is subject to the U.S. Self-Employment Tax, i.e. Social Security and Medicare contributions, even if you earned it while outside the U.S. That might be a very good thing, though, because the U.K. NI contributions and benefits may be less attractive. The FEIE cannot protect your self-employment income from the U.S. SE Tax.

Finally, note that since you had some U.S. taxable income in 2014 (again, assuming 2013 was a typo) you have only until April 15 (soon!) to make a 2014 U.S. Roth IRA contribution if you have not done so already, and assuming you are eligible to contribute. I recommend a low-cost Vanguard mutual fund, such as their "Target Retirement" index fund, the one closest to your expected retirement age.


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## QueenBcp (Dec 1, 2013)

You're right, I definitely meant 2014. I think I need more coffee, my brain is confused. Thank you so much for all this great information. The tax publications and forms make me feel quite incompetent. 

So I believe I will be getting a refund based on my initial calculations, so I just enter 0 on the 4868 lines 4-7 I'm guessing. I'll send that in tomorrow!

Good to know about the FinCEN, as I've never even heard of that before.

So it seems I just submit the 2555 in June rather than now. Again, good to know.

I have no money to send over to a Roth IRA (although I already have a one), so I guess that's out!

Thank you!


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## BBCWatcher (Dec 28, 2012)

QueenBcp said:


> So it seems I just submit the 2555 in June rather than now. Again, good to know.


IRS Form 2555 is part of your tax return (IRS Form 1040 and related attachments, as applicable). You don't send Form 2555 in separately -- it's one among many possible attachments to 1040. Your entire tax return will be due at the IRS on October 15 with the extension, but you can file as early as June if you're choosing to take the Foreign Earned Income Exclusion (Form 2555) since that's when you'll qualify for it, for your foreign (non-U.S.) earned income in 2014 (July to December).

As another bit of advice: it sounds like you're trying to do things manually, using the forms themselves. I wouldn't. Try using the free, interview-style tax preparation software options. TaxAct.com and TaxSlayer.com both offer free tax prep options. (They also try to upsell you on extra features, and you can decide whether they're worth paying for or not. You're not required to buy those extra features.) They'll ask you a series of questions, interview-style, and provide online help if you're not sure how to answer a particular question. You answer the questions, and they'll fill out the forms for you based on your answers and do all the mathematical calculations. You may be able to file electronically, but if for some reason you're not you'll still be able to print out the forms on paper, sign your tax form, and mail it in.


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## QueenBcp (Dec 1, 2013)

Ah, okay, thank you for clarifying.

I'm using H&R Block because I used that last year (and Turbo Tax before that) but I haven't finished filling it out yet so I don't have the certain line items that you might see on the 1040 yet, line like 74. So that isn't really helping me fill out the 4868.


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## Bevdeforges (Nov 16, 2007)

First of all, you may want to take a look at IRS Publication 54 just to get an overview of what's going on here: http://www.irs.gov/uac/Publication-54,-Tax-Guide-for-U.S.-Citizens-and-Resident-Aliens-Abroad-1

Then, you may want to check to see if H&R Block software can handle a foreign resident return. This is the list of electronic filers that work for those of us living overseas: http://photos.state.gov/libraries/france/5/irs/efiling.pdf I see Block is on there, but keep the list handy just in case.

And as BBC mentioned, TaxAct and TaxSlayer both have free versions available for anyone.

The first year of filing from overseas is generally the toughest. Next year, when you qualify as bona fide resident, it will all go much quicker and easier. But generally, what you need to file is a 1040 (long form), 2555 (long form or "EZ" version) and a Schedule B, if only to check the box at the bottom of the form asking if you have "foreign accounts." If the total balance in all your foreign accounts is less than $10,000 you don't have to file the FinCen (FBAR) stuff. But even if you do, it's pretty easy - just a report, not a tax filing.

Don't overthink the 4868. Just make a reasonable estimate of what you think you owe (if anything). If you're off you may have to pay a little interest with your returns, but chances are you probably won't.
Cheers,
Bev


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## QueenBcp (Dec 1, 2013)

Thanks All! I really appreciate the help!


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## QueenBcp (Dec 1, 2013)

Just as a follow up in case anyone else is struggling with tax extensions, you can calculate and submit these via e-file on the H&R Block Website. I believe you can also use TurboTax's website as well. Makes it a lot easier!


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## BBCWatcher (Dec 28, 2012)

Excellent point, QB. Taking a quick survey, the IRS's Free File Fillable Forms, TaxAct.com, TaxSlayer.com, TurboTax's "Easy Tax Extension," and H&R Block's Free online edition all provide free e-file options for IRS Form 4868 to extend your filing deadline to October 15. (There may be even more free options beyond that.) You still have to complete your extension request by April 15, but that gives you a little extra time if you've got a foreign postal service between you and the IRS.

I see that H&R Block has a free, basic online tax preparation option. I didn't know that. I don't know how good a fit it is for U.S. tax filers living overseas, but it's another one to investigate.


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## byline (Dec 5, 2011)

BBCWatcher said:


> I see that H&R Block has a free, basic online tax preparation option. I didn't know that. I don't know how good a fit it is for U.S. tax filers living overseas, but it's another one to investigate.


If you click on the Free File link and go to the next page, it will show you which services are available to U.S. citizens and resident aliens with foreign addresses. Clicking on the "$60,000 or less" option, I see that Online Taxes at OLT.com, TaxSlayer, FileYourTaxes.com, Jackson Hewitt Tax Service, 1040NOW.NET, TaxACT and 1040.com Free File Edition are listed as being available to U.S. citizens and resident aliens with foreign addresses.

H&R Block's Free File looks to be _only_ for U.S. citizens living in the United States, and filers must be 53 or younger.


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## BBCWatcher (Dec 28, 2012)

I just tried the IRS's Free File Fillable Forms to see if I could e-file IRS Form 4868. I crammed an overseas address into the fields as best I could, and that meant e-filing didn't work.

So, your mileage may vary. If one of the free options doesn't work (like that one), try another. Allow enough time before April 15 to experiment with this.


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## Bevdeforges (Nov 16, 2007)

byline said:


> If you click on the Free File link and go to the next page, it will show you which services are available to U.S. citizens and resident aliens with foreign addresses. Clicking on the "$60,000 or less" option, I see that Online Taxes at OLT.com, TaxSlayer, FileYourTaxes.com, Jackson Hewitt Tax Service, 1040NOW.NET, TaxACT and 1040.com Free File Edition are listed as being available to U.S. citizens and resident aliens with foreign addresses.
> 
> H&R Block's Free File looks to be _only_ for U.S. citizens living in the United States, and filers must be 53 or younger.


What we've found recently, however, is that a few of the tax preparation services offer free versions of their filing software with no income or age restrictions if you go directly to their website (i.e. NOT through the IRS Free File link). 

Not at all sure what the age restriction business is all about. Asked a professional tax preparer friend of mine why age 53 should be a cut-off and she said it made no sense to her.
Cheers,
Bev


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