# Which form to file please?



## Staf161 (Jan 19, 2015)

I have lived in New Zealand over 20 years and have always filed for the Full US Exclusion with my 1040 tax forms. Now my circumstances have changed, and I am totally confused as to how to file this year's return. Could anyone advise my steps to do please to file in the simplest way?

I am now married - to a New Zealander (no green card, no social security number) 
Can I simply file Married-Single and leave the spouse and their income out?

I retired and have no W-2, NZ or US earnings or wages to declare, only joint interest and NZ rental income.
Do I use a 1040, 1040EZ, 1040NR form? Do I list 50% of joint interest and rental income? (Are attachments required?) The amount is limited, I suspect under U.S. 10k.

I moved to the U.K. 2 Jan. 2015 from NZ; even though I have no US address - I visited NJ for 93 days (over my parents' 80th birthdays) and believe I cannot use the usual overseas tax Exclusion now...?
Am I able to deduct - on which US form - my NZ taxes paid as a US tax credit for my 9 months abroad?


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## BBCWatcher (Dec 28, 2012)

Yes, you can file "Married Filing Separately" (MFS). To do that, on IRS Form 1040 (2014 edition -- other years are similar or identical) you would:

(a) Check box 3.
(b) Write your spouse's full name in the space next to box 3.
(c) Write "NRA" in the space for your spouse's social security number at the top right.

This is all in the instructions on the form and accompanying the form. Just follow the IRS's instructions, or let your favorite tax preparation software (TaxAct, TurboTax, etc.) follow the instructions.

You and your spouse can agree to file a joint tax return if you wish. (You both must agree and participate.) A non-resident alien spouse can make that choice via something called a Section 6013(g) election. It doesn't sound like that path would be of benefit from what you describe, but I mention it for completeness and you can investigate it if you wish.

As a U.S. citizen living overseas (I presume) you would never use 1040NR or 1040EZ. I think there may be occasions when you can use 1040A -- check that, but probably not. Form 1040 will certainly work, even if you are eligible to file 1040A.

Yes, when filing MFS you would generally report interest and other passive income on jointly owned assets according to your ownership share. Standard attachments are required for passive income, notably Schedules B, D, and/or E. There may be other attachments required depending on your circumstances. IRS Form 8965 ("Health Coverage Exemption") is popular -- and your 93 days in New Jersey in 2014 might have caused a problem there. (Lesson learned if so.) IRS Form 8938 ("FATCA") may apply if you have significant financial assets. IRS Form 8621 is also fairly popular, and yes, IRS Form 1116 ("Foreign Tax Credit") is popular. Schedule 8812 ("Child Tax Credit") is very common. A trip through IRS Form 6251 ("Alternative Minimum Tax") is also common. Those are just examples.

You may not be able to use the Foreign Earned Income Exclusion and Foreign Housing Exclusion (IRS Form 2555), but that doesn't matter since you didn't have any earned income in 2014, so you wouldn't be able to use them anyway. Thus your visit to the U.S. doesn't matter for federal income tax purposes except perhaps if you owe a noncoverage penalty (Form 8965). It might for New Jersey state income tax purposes -- you'll have to check that. Yes, you can deduct your New Zealand income taxes -- see IRS Form 1116 ("Foreign Tax Credit") and its instructions.


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## Bevdeforges (Nov 16, 2007)

A couple comments on what BBCWatcher has already said:



> and your 93 days in New Jersey in 2014 might have caused a problem there.


Probably not, given that you have been living outside the US for quite a while now. For all intents and purposes (including the ACA thingee on line 61) you are using the "bona fide resident" criteria and not the "physical presence test." Your 93 days in the US don't jeopardize your "overseas resident" status at this point.

You don't require any pseudo-W-2 or pseudo-1099s to prove your income. Your share of jointly held income depends on just how you have things arranged (i.e. your ownership interest). If you're a half-owner, then yes, you'd report half the income on the account or investment. But basically, it's on a honor-system. This means that if local custom or law specifies a different way of dividing asset interests between spouses, you can use that. (Example: in France some people are married under an agreement where assets aren't co-mingled. In that case, each spouse is entitled to the proportion of the income that corresponds to their actual contribution toward the asset value. That can change things significantly.)

Keep adequate records so that you could explain how you got the numbers you report if questioned - but don't send them in with your returns unless it specifically asks for a schedule or other attachment.

And it's a longstanding "issue" here in the forums as to whether or not you "must" give your NRA spouse's full name or not. It's kind of a moot point if there is no SSN or ITIN to connect them to. Some of us indicate "NRA" for both name and SSN of our NRA spouse and have had no objections over the years.

And, just for the record, if your total reportable income is less than $3500 or so (the figure is slightly higher this year - check the IRS site for the filing thresholds), you don't have to file at all.
Cheers,
Bev


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