# please help!! - uk/us dual citizen us taxes



## lizis32

not sure if this is the right forum (I've also posted in the US expat forum), but... Please, please, I'm really hoping someone can help me. I was born in the US, moved to the UK when I was 11. A couple of months ago (I'm 32) I transferred to my employer's US office. Someone recently mentioned to me in passing how I should have been filing US tax returns in the UK?!! I had no idea that I was meant to do this and of course would have done, had I known. How do I now approach the IRS and explain the situation? What am I supposed to file and how do I do that? In the UK the taxes are all done through your employer and I'm really confused. I'm so worried now, but I genuinely had no idea I was meant to be doing this. Please help as I really want to have everything correct and filed appropriately!! Anxiety and stress overload atm. thanks


----------



## Bevdeforges

OK, first of all, you are far from the first person to have suddenly found out about your US tax filing obligation somewhat late in life. Happens all the time, no matter what the IRS says.

First thing to do is to back file the last 3 to 4 years of US returns. (Or, wait until after the first of the year, file your 2012 return and then file 3 years back - 2011, 2010 and 2009.) Because you have been resident in the UK, you're entitled to the "foreign earned income exclusion" which means you can formally declare that your earned income (i.e. salary) should be excluded from taxation. 

While you do have to declare your worldwide income for the US for each year you file, if your primary source of income is your salary, your miscellaneous items (like bank interest) shouldn't result in any tax obligation. As long as those back filings show no (or very little) tax due, the IRS will simply accept that you're ok to move forward.

If you have more than $10,000 tucked away in one or more bank accounts or other financial type account in the UK (or anywhere else outside the US), you'll have to file 6 years of back FBAR reports. These aren't tax filings as such, but go to a separate office in the Treasury Department. The official form is called TD F 90-22.1 and it is nothing but a list of your foreign (i.e. to the US) accounts with the high balance for the year. (Unless you've got huge investments stashed somewhere, a good faith estimate will do - don't go crazy trying to find the precise figure.)

All the forms you need are available on the IRS website: Forms & Pubs
For help filling them out, you can either use one of the tax preparation software packages that should be coming out toward the end of next month, one of the on-line tax prep sites or ask around at work, particularly in the accounting department. There's bound to be someone who would be willing to take you through the basics of the US tax forms. Or, after the first of the year, look around for a VITA tax service in your area - where volunteers help folks with their tax forms. They very often set up in local libraries, so ask at your local library if you don't see the signs.

The main forms you'll need are: 1040, 2555 (go for the 2555EZ if you can) and a Schedule B. Download (from the same IRS website) Publication 54, which is for taxpayers resident overseas and explains how the foreign earned income exclusion thing works.
Cheers,
Bev


----------



## lizis32

Bev - thank you soo much for your help. I can't tell you how much I appreciate your reply. You have managed to calm me down drastically (I had images of the IRS bursting through my door halfway through a family dinner - ok perhaps I've seen one too many films!). Right onwards I go to attempt the filing. Would it be ok if I msg you if I have any other questions ( I will try and ask around at work,etc tho first. Promise!)?

Thank you again!!


----------



## Bevdeforges

We're coming into the season where the Expat Tax section should start to get considerably more active. Post your questions here, and we'll attempt on a collective basis to get you sorted out.

If you're in an area near a university, you could check around and see if their accounting students do a VITA program (VITA = volunteers in tax assistance) or see if one of their accounting students would be willing to help you do at least the first return. Once you have a model to go by, the next ones should be fairly easy to do. 

Hint: you don't have to worry about what is or isn't deductible and all the other subtleties of US tax law as long as your salary income is less than the FEIE amount. That only applies to your back filings, though. Once you take up residence in the US, you lose the exclusion and have to start engaging with deductions et al.
Cheers,
Bev


----------



## lizis32

Bev, you're amazing! thanks! 

Ok - filing status...eurgh I don't think I can claim my children as legal dependants as they don't have SSNs yet. Is this correct? I was going to file as head of household (as suggested by the IRS interactive tax assistant), but my kids don't have SSNs yet and wouldn't have had them for the tax years that I'm filing (2008-2011). Do I therefore need to file as single? I have been married to my husband, an NRA for each year I'm filing, but for part of two of the years in question, I was on maternity leave, so he brought in more income than I did and then when I went back to work mid 2010, I was bringing in more than 50% of the household income. Or would it be married, filing separately? so confused....


----------



## Bevdeforges

No, you can't claim your kids until and unless they have SS numbers. However, if you're taking the FEIE you probably don't need to claim your kids or your husband to get your tax bill down to -0- (which is, after all, the point of the exercise, no? <g>)

File as "married, filing separately" - and don't give out any more information than you have to. You do NOT report any income in your husband's name - only your income (which should then be pretty much excludable, unless you make more than about $90K a year). Chances are, you should not have to worry about dealing with deductions or any other subtleties of the tax code - just take the "standard deduction" against any non-salary income you have (bank interest and such). 

Keep it simple. Where it asks for your husband's name and SS # just fill in "NRA." 
Cheers,
Bev


----------



## lizis32

Once again, thanks Bev


----------



## lizis32

just checking - do i need to file a schedule b even if my foreign bank account never had more than $10,000 and if the interest earned in that account was never over $1,500? (i.e. so every answer is 0 or no..)?

also - this is related to all the tax forms - for lines that dont apply or where you have nothing relevant - do you need to put 0 next to each of those lines or do you leave them blank?

Thanks


----------



## lizis32

o and should I complete the exemptions bit at all or just leave this blank (i'm assuming im not interested in claiming exemptions or anything since im filing the 2555-ez and annual salary was less than the threshold of $92,900).

thanks again!


----------



## Bevdeforges

lizis32 said:


> just checking - do i need to file a schedule b even if my foreign bank account never had more than $10,000 and if the interest earned in that account was never over $1,500? (i.e. so every answer is 0 or no..)?
> 
> also - this is related to all the tax forms - for lines that dont apply or where you have nothing relevant - do you need to put 0 next to each of those lines or do you leave them blank?
> 
> Thanks


It didn't used to be the case, but these days most tax preparers advise filing a schedule B even if it's just to check the box "no" at the bottom of the page. Just leave the top part blank.

On the 1040, only fill in the lines you need. You can leave the rest blank. 
Cheers,
Bev


----------



## Bevdeforges

lizis32 said:


> o and should I complete the exemptions bit at all or just leave this blank (i'm assuming im not interested in claiming exemptions or anything since im filing the 2555-ez and annual salary was less than the threshold of $92,900).
> 
> thanks again!


If you don't need or want to claim the additional exemptions, don't bother filling in those lines. Do be very sure to claim your own exemption (line 6a) - otherwise they assume you are being claimed as an exemption on someone else's form and that may come back to bite you at a later date.
Cheers,
Bev


----------

