# First year as US expat in UK



## Water Dragon (Jun 28, 2011)

I left my job in the US in early July and haven't worked since. I moved to Scotland the end of September. I have deliberately not opened any joint bank accounts with my husband as I don't want his income to become entangled in the IRS mess. I have a bank account that hasn't had over 25 pounds in it since opening.

1. Can I file this year's taxes using TurboTax Online to get my refunds (my usual method)?
2. What, if any, additional forms do I need to complete, other than the 1040EZ?
3. As I am now retired, what forms will I need to file each year after this?
4. Am I correct in thinking that if I am on my husband's bank account(s), his income becomes reportable to the IRS (even if I file "married, filing single")?

Thanks for any help and advice.
Laurel


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## Bevdeforges (Nov 16, 2007)

Water Dragon said:


> I left my job in the US in early July and haven't worked since. I moved to Scotland the end of September. I have deliberately not opened any joint bank accounts with my husband as I don't want his income to become entangled in the IRS mess. I have a bank account that hasn't had over 25 pounds in it since opening.


You're being a bit overly cautious - but better safe than sorry, eh? I'm assuming you just got married this year. But it's ok to go joint on the bank accounts if you wish to. (It may be easier in the long run if you keep your finances separate, but it's not obligatory - keep reading.)



> 1. Can I file this year's taxes using TurboTax Online to get my refunds (my usual method)?


Yup - though you should probably file as "married, filing separately" reporting only your income for the year. With Turbo Tax (unless they've changed it since last year) you may have difficulty indicating "NRA" (non-resident alien) for your husband - both for his name and his SS number or ITIN. You do NOT need to get a taxpayer ID number for him and actually should avoid doing so.

One other possible issue (again, depending on whether or not they have changed the software this year) is that if you've normally e-filed, you may find that either the TurboTax site or the IRS e-filing process will not accept your return if you are filing "separately" without a SS or ITIN for your husband. This is easily resolved by printing out the returns and just mailing them in.

We'll have to wait and see in mid-January or so to see which other tax preparation sites and softwares are able to deal with foreign addresses (traditionally the big issue), but TurboTax has taken these for some time now. Last year, I know I tried TurboTax and it wouldn't allow me to print my return because I don't have an ITIN for my husband, and I switched to TaxAct, which allowed me to prepare and print the forms indicating NRA in all the appropriate spaces. 



> 2. What, if any, additional forms do I need to complete, other than the 1040EZ?


For this year, probably nothing. If and when you get a job and start earning salary in your own name, you will have to start filing a 1040 (long form) in order to take the Foreign Earned Income Exclusion - which allows you to exclude your salary income from consideration in your US taxes. (Next year, or whenever that happens, we can guide you through that process.)


> 3. As I am now retired, what forms will I need to file each year after this?


If you are retired and drawing any sort of pension or just your US Social Security, you will have to file US tax returns every year your worldwide income exceeds $3500 (or so - it changes each year). You'll need to include any interest from US bank accounts, as well as any income from where you are now. One big disadvantage to filing married, filing separately is that your social security benefit becomes taxable, however, if you aren't drawing your social security just yet, you can hold off for a bit dealing with that.


> 4. Am I correct in thinking that if I am on my husband's bank account(s), his income becomes reportable to the IRS (even if I file "married, filing single")?


Actually, the good news is that, no, you aren't correct in your thinking on this. As long as you are filing "married, filing single" you should not include any of your husband's income in your US return. If you are a joint owner in his bank accounts and the balance in your foreign accounts (including the joint account or accounts) exceeds $10,000 in any given tax year, you are supposed to file a separate report listing your foreign bank accounts with the Treasury Department. But that does NOT mean that you need to claim any part of your husband's income on your US tax return. You just declare the account as an account held jointly with your NRA husband. 

This year, for the first time, this report of bank accounts has to be done online - but it remains to be seen how that works out. 

Oh, and the other good news is that, by living overseas you have an automatic 2 month extension for filing your taxes - to June 15th. The Treasury report listing your foreign (i.e. non-US) bank accounts is due by June 30th - if you even have to file that, which it sounds like you don't for this year.
Cheers,
Bev


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## Water Dragon (Jun 28, 2011)

Thanks so much for the info. I don't intend to get a job, and it will be at least 3 years until I take SS if I decide to start at age 62, maybe not even until 65. It sounds like it will be relatively simple and easy for the next few years, at least. 

After filing this year just to get my refund, since I won't have any income until SS, will I need to file anything? 

If my husband is put on my bank account, is that the only one I would need to declare IF the balance goes over $10,000 USD equivalent? If he adds me to his account, we would have to report it as he earns over $10,000 USD annually. If that is solely to the Treasury Dept. and has no tax implications, we may look into it.

I'm concerned about the increasing intrusion into personal business while living out of the country. I will do what is legally required, but I don't want to cause us any problems with the banks here not wanting American customers.

Thanks!


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## Bevdeforges (Nov 16, 2007)

OK, you shouldn't need to file anything after this year until and unless you have worldwide income of at least $3500 (roughly) - that's the filing threshold for the "married filing separately" category. 

Now, if you wind up as a joint owner on a bank account with your husband (doesn't matter whether he is added to your account, or you to his), then you only need to declare your accounts (i.e. those in which you have a joint or separate interest) if and when the total high balance in your foreign accounts exceeds $10,000 in any given tax (i.e. calendar) year. It does not matter what he earns. It's your obligation (as a US citizen) to report you ownership in any foreign account. He has no obligation to report to the Treasury if he isn't a US citizen or taxpayer. It's your ownership or joint interest in the account that has to be declared.

So far, the banks not wanting American customers are mostly Swiss, German or Austrian. And even at that, it seems that this is directed mostly at investment type accounts, not simple checking and savings accounts - though that may change over time. 
Cheers,
Bev


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