# Filing Taxes for the US while in the UK



## pink19 (May 29, 2018)

As some you know I am in the UK on a spouse visa and i am from the US, just kind of trying to start getting my taxes in order and i am a bit worried, my mother always did my taxes in the US so i have no experience with this. What forms will I need to fill out? and is there an online service i can use like a e file or anything? I have made less that 15k pounds this year, no bank accounts have been 10k or more throughout this year so that makes one less form i need to fill out. But can anyone give some tips or advice on how i go about this? thanks in advance !


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## nyclon (Apr 3, 2011)

I have moved your post to the tax forum where you should get a better response.


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## Moulard (Feb 3, 2017)

The Tax Cuts and Jobs Act of 2017 has resulted in a number of changes to the tax forms so none of us have actually filed yet with the new forms... but based on prior years... and what I can see of the new forms...

1040 - 
standard tax form...
Schedule 1
Additional Income - used to capture the amount from the foreign earned income exclusion from Form 2555
Schedule 3 
Non Refundable Credits - used to capture the amount of foreign tax credit from Form 1116
Schedule 6 
Foreign Address Info
Schedule B
You will need to complete Part III at a minimum
Form 2555 and/or Form 1116
You will need to decide if you want to take the Foreign Earned Income Exclusion (Form 2555) or take a Foreign Tax Credit for UK taxes paid to offset US taxes (Form 1116)

Form 8965 
I am not sure if this is still required, if it is, then it is used to claim an exemption from the Affordable Care Act health insurance coverage requirements


Unless your tax affairs are more complicated then there are a bunch of other forms that you may need, or may need in the future but not now including

Schedule A - The increase in the standard deduction means you are unlikely to need to itemise deductions
Form 8938 - Foreign Accounts

There is no need to panic you have until June to file (Oct if you request an extension). So take your time, do your research and gather your paperwork and plan (particularly if this is your first year in the UK and you want to use the FEIE). The hardest things should be addressing the different tax years, currency conversion and trying deal with things like retirement funds and the like... however no doubt some of our UK resident folks can speak more directly about them.


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## pink19 (May 29, 2018)

wait so there are like 6 forms im going to have to fill in?? is it worth me going to a tax expert like h&r block instead since i have absolutely no idea what im doing?


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## Bevdeforges (Nov 16, 2007)

For a general overview of what is required, you can download IRS publication 54 from the IRS website. There's way more detail than you need, but the basic forms are pretty simple. (That's to say, the first time through them will be the roughest. After that you pretty much just copy what you did last year.)

But frankly, there is no rush what with this government shutdown over there. While they are taking returns (or will be starting at the end of January), they aren't processing refunds, which kind of means they are accepting the forms but not doing much with them once they have them.

And just a clarification - it's not a matter of any one bank account with more than 10K in it, but rather the combined total of all your foreign (i.e. non US) accounts that matters. But that report (FBAR or FinCEN) is merely informational and not part of your tax return.

https://www.irs.gov/publications/p54

And you may want to wait until the Free File program starts up (again, toward the end of January) - with only limited income you should be able to file online for free. Or at least get your returns done online. 

If you're filing as married, filing separately and your NRA spouse doesn't have a US SSN - or you don't want to provide his SSN to the IRS - you may not be able to e-file. But you can probably get the software to prepare the forms for you and then just copy the forms onto paper versions of the forms.


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## pink19 (May 29, 2018)

I suppose i will just wait for the free e file forms to be released for this year, i just honestly have no idea, i am so confused about all the correct forms but if the freefile will talk me through it i suppose it will be okay, i guess ill just wait and see what it looks like when it happens, its really stressing me out but hopefully it will be okay : /


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## Bevdeforges (Nov 16, 2007)

If you only have a limited amount of income from a single source - or say, just a salary plus some interest income - the new form 1040 is really pretty quick and easy to fill out.

The Free File stuff is all commercial tax preparation software that does more or less talk you through the process. But take a look at the new "half-page" 1040. https://www.irs.gov/forms-pubs/about-form-1040

Assuming you are only talking salary plus a little interest income, you can probably get away with filing just a 1040 plus the schedule to report your "foreign" address, a 2555 (the EZ form) and the Schedule B (just to say whether or not you have foreign bank accounts to report). 

The good news is that the health care coverage bit has been reduced to a single check box, where you indicate that you either have coverage or you are exempt. No more separate form to fill out.


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## pink19 (May 29, 2018)

Thanks so much! It really puts my mind at ease having an idea of the forms that i will need to file etc. My last question is about FBAR, from my understanding you would declare your bank accounts if they held 10,000$ or more together at any one point, but to be honest i really dont think me and my husbands joint accounts have made it anywhere near that amount at any one time, but just incase im just not doing the math right, would it hurt to declare them anyway to be on the safe side or could that cause more issues?


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## Bevdeforges (Nov 16, 2007)

You'll get a variety of opinions on that one. But if the total of all accounts isn't at least $10,000 you can skip the whole thing. Or, if you do decide to declare your foreign accounts, round "up" on the high balances you report so that the total exceeds $10,000 even if only by a little bit. There's no penalty for over-reporting. (Also not much evidence that they do much of anything about "checking" whatever balance you do report.)


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## SoCal85 (Jan 14, 2019)

Unfortunately US tax law can get complicated fast when some international component is involved. Since your income is above the standard deduction ($12,400 in 2018) you'll need to file a US tax return. Is the income earned income? if so, then you should be able to claim the foreign earned income exclusion on Form 2555 to exclude all of your foreign wages. 

With respect to FBAR, if total aggregate maximum balance during the year is less than $10,000 then you aren't required to file. I would skip unless it's borderline. Make sure when translating you use the 12/31/18 US Treasury Reporting Rates. These likely aren't going to be available yet until the gov shutdown ends.

Also, do you own any companies in the UK? Owning non-US companies also brings about additional required tax filings even if income is minimal in the entity.


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## pink19 (May 29, 2018)

So for fbar, im still a bit confused, is it if the ammount held in all accounts at one time comes to over 10k that it needs to be declared? like say at one point we had 4k worth in one account and then 7k in another account that would put us over so we would need to declare it? or is it if you have put that much in over the time regardless, even if the 10k has not been sitting in the account at any all at once time on its own?


Also confused about FEIE or tax credits, which is better to use? My income is through my job and ive probably made less than 15k through that this year, so im not sure which is better to use?


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## Bevdeforges (Nov 16, 2007)

The $10K threshold for filing FBAR (FinCEN) refers to the combined total balance of all your "foreign" (non-US) financial accounts. What you're reporting for each account is the highest balance for the year. So, if the highest balance in account #1 for the year was $4000, and in your 2nd account the highest balance for the year was $7000, then yes, you have to file and list both accounts. Doesn't really matter if the high balances were at the same time or not.

Similarly, if you had one account with a $15,000 balance, and you shifted the whole amount to a second account during the year, you report both accounts, each with a $15,000 high balance. Yes, it is double reporting the same money - but that's how the FBAR filing works.

FEIE or tax credits - neither one is necessarily "better." Depends on your situation. However, don't forget that if you have been using FEIE and then switch over to tax credits, you could be deemed to have revoked your election to take the FEIE and won't be allowed to use it in the future without asking the IRS for permission to do so.

The FEIE is probably the easier of the two options if your main source of income is from salary income. However, if the FEIE doesn't cover your salary income (if you earn more than the $100K or so allowed under the FEIE), you can take the FEIE and then take tax credits for the "leftover" income. (It does complicate the math a bit, since you have to apportion the foreign taxes you've paid between the part covered by the FEIE and the leftover bit.)

One other thing to note about taking the foreign tax credit is that, if you file a joint return with your NRA spouse in your country of residence, you have to apportion the tax paid - both by type of income ("earned" vs. "unearned") and by spouse.


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