# US Taxes 2016 - for those filing from Overseas



## Bevdeforges

Just a couple of items for the moment. I'll add to this message/thread as things pop up.

First of all, be sure to check the What's New section for both Pub 54 (for overseas filers) and Pub 17 (the general guide for filing US income taxes).
https://www.irs.gov/publications/p54/ar01.html#en_US_2016_publink100047290
https://www.irs.gov/publications/p17/ar01.html#en_US_2016_publink1000170255

Oddly enough, neither of these publications seems to indicate the April 15th deadline for filing FBARs this year (also known as FinCEN 114). I did find mention of it on the IRS Report of Foreign Bank and Financial Account page: https://www.irs.gov/businesses/smal...t-of-foreign-bank-and-financial-accounts-fbar but you have to know what you're looking for. (Also note that the filing deadline for tax returns covering 2016 is April 18th this year, so apparently the FBARs are actually due before the 1040 filing deadline.) Overseas filers are still eligible for an automatic 2 month extension - to June 15th. But remember this is only for filing. If you owe taxes, interest will start accruing on the payment from April 15th.

The Free File section is open on the IRS site. Using their Free File finder wizard, I note that the options are a bit limited for overseas retirees. Many of the programs are only open to those age 50, 52 or less. There are more options if you're younger and employed overseas.

The Free File Fillable program won't be available until next week (January 23rd) however there is an information sheet available for "International Filers" https://www.irs.gov/uac/free-file-fillable-forms-military-and-international-filers They indicate that there are "limitations" to the use of form 2555, but so far nothing listed specifically if you go to the Forms and Limitations link provided. Stay tuned.

That should get you started. I'll update as information becomes available.
Cheers,
Bev


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## manny.j

Thanks Bev and Happy New Year to you!

In regards to above, I do recall "Free File Fillable Program" being perhaps the only free software for filing US tax returns online from overseas (outside the USA). My wife and I had problems last year with bugs in this online software and ended up filing them in April during our visit there...hopefully these bugs are now resolved in the updated version when it goes online. One thing I noticed while signing up again for this website is the requirement for a US telephone number, which I don't think existed last year.

Appreciate all your help and support on this website, thank you.


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## Bevdeforges

To be honest about it, the Free File Fillable forms have not been particularly suited to overseas filers in past years. The first few years they excluded anyone with a "foreign address" altogether. Now I note that there are some "limitations" for form 1116 - though not having filed one of those, I'm not sure how restrictive that particular limitation is for overseas filers. (Something about not being able to include "attachments.")

And, I note that they do say something specifically about the SSN fields not taking any letters - which kind of rules out filing for those of us married to NRAs with no ITINs.

Do try the wizard for the free file stuff - though if your AGI is over $62,000 you can't use the program at all. Take a look at some of the computer magazine reviews of the top tax programs to see what's the cheapest you can get away for. Personally, I prefer downloading software to my computer to play around with rather than doing everything "in the cloud." 

As a last ditch, however, most of the pdf forms you download from the Forms and Publications section of the IRS website can be filled in and printed. You have to do the math and all, but generally I just print those off and mail them in. Have tried a couple of times to e-file, but the NRA spouse seems to be the major stumbling block.
Cheers,
Bev


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## manny.j

Bevdeforges said:


> To be honest about it, the Free File Fillable forms have not been particularly suited to overseas filers in past years. The first few years they excluded anyone with a "foreign address" altogether. Now I note that there are some "limitations" for form 1116 - though not having filed one of those, I'm not sure how restrictive that particular limitation is for overseas filers. (Something about not being able to include "attachments.")
> 
> And, I note that they do say something specifically about the SSN fields not taking any letters - which kind of rules out filing for those of us married to NRAs with no ITINs.
> 
> Do try the wizard for the free file stuff - though if your AGI is over $62,000 you can't use the program at all. Take a look at some of the computer magazine reviews of the top tax programs to see what's the cheapest you can get away for. Personally, I prefer downloading software to my computer to play around with rather than doing everything "in the cloud."
> 
> As a last ditch, however, most of the pdf forms you download from the Forms and Publications section of the IRS website can be filled in and printed. You have to do the math and all, but generally I just print those off and mail them in. Have tried a couple of times to e-file, but the NRA spouse seems to be the major stumbling block.
> Cheers,
> Bev


In other words, e-filing of taxes for Americans abroad is still not suitable for everyone....

I checked About Free File Program and noticed they have two options with one below $64K (recommending to use "Use Free File Software") and other 
for income above $64K (recommending to use "Free File Fillable Forms"). 

I am willing to use paid version if we can successfully submit the forms online. I did pay for TaxAct 2 years ago but ended up still submiting in person as it had bugs and found it not very user-friendly  So until there is some confidence buildup from others experience...I feel, in my situation, best is to download the forms and fill on my computer, print and mail them. Although I will keep searching and will share if something is really practical for everyone...


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## Bevdeforges

To be honest, I've about given up on e-filing from overseas. A couple years back I used TaxAct and was quite happy with the results. Their review said it was ready to go - and they even had a little box to tick to indicate that my spouse was an NRA (so it inserted "NRA" in the SSN box). Went to e-file and the IRS wouldn't take it because I was "missing" my spouse's SSN or ITIN. At that point, I just printed everything off and mailed it in and have been doing that ever since.

The trick with some of the Free File offers is that, in at least a couple of cases, you can only use the Free File version to e-file your forms. If you want to print the forms before you e-file them, you wind up having to pay for the privilege. (Now, that was a few years back and may have changed by now.)
Cheers,
Bev


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## Bevdeforges

*Consider filing the 1040A*

In surveying the Free File sites and the regular websites for the major tax preparation software, I just noticed that several of them offer free preparation and filing for those folks filing 1040EZ or 1040A forms. While you must file a 1040 (used to be called the "long form") to take the FEIE, those of you who are retired and living off pension and/or investments may well be able to file a 1040EZ or 1040A and thus get free prep and filing, too. (There are income limits, and if you're filing married filing separately, you can't use the form 1040EZ.)

The instructions for the EZ and A forms include a listing of who can and can't file each form. But it's an easy way to get around the rather elaborate restrictions on filing through the IRS Free File system.
Cheers,
Bev


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## Moulard

The other thing to note is that the filing dates for the FBAR have changed.

The new filing deadline is April 15 but you get an automatic extension to Oct 15.

https://www.fincen.gov/news/news-releases/new-due-date-fbars-0


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## manny.j

Hello,

One quick question- Last year when we tried filling our US tax return using IRS approved Freefilefillableforms website, we received an error related with Form 1116.

The error was specifically to do with Part II (in Form 1116) column n where if taxes are withheld at source (i.e this box has a non-zero value) then we are required attach Foreign-Tax-Withheld-On-Interest-Statement to column .

Therefore, any suggestions, where this statement template can be located on Freefilefillableforms?

Many thanks in advance  Manny


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## manny.j

manny.j said:


> Hello,
> 
> One quick question- Last year when we tried filling our US tax return using IRS approved Freefilefillableforms website, we received an error related with Form 1116.
> 
> The error was specifically to do with Part II (in Form 1116) column n where if taxes are withheld at source (i.e this box has a non-zero value) then we are required attach Foreign-Tax-Withheld-On-Interest-Statement to column .
> 
> Therefore, any suggestions, where this statement template can be located on Freefilefillableforms?
> 
> Many thanks in advance  Manny


Actually I found the reason as is attachment is not possible on this website...perhaps the software has not been updated to enable it. 

But...can one include information/ statement on the exchange rate used from £ to $ for filling tax-return? i.e. is there a box on Form 1116 or a different one where we could provide this information for IRS's reference?


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## Bevdeforges

Yeah, the thing about not being able to attach necessary documents is noted on the list of "known issues" for the Fillable Forms on the IRS website. https://www.irs.gov/uac/list-of-available-free-file-fillable-forms

For years, the Fillable Forms could not deal with foreign addresses, which ruled them out for overseas filers. That appears to have been fixed, but note that both the 1040 and 1040A forms  state this limitation:


> You cannot enter letters where the form is expecting a nine digit Tax Identification Number (a Social Security, Individual Tax Identification Number, etc.)


For those of us married to NRAs, the instructions usually say to enter NRA for the ITIN if the foreign spouse is not subject to US taxation and doesn't have a SSN or ITIN. I noticed in the commercial tax package, they now leave the ITIN space blank (for e-filing, I suppose) but will not allow you to do the same with the spouse's name line (nor enter "Non-resident alien" or something similar.

The Fillable Forms are still a work in progress, I guess.
Cheers,
Bev


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## Bevdeforges

That was changed. https://www.irs.gov/businesses/smal...t-of-foreign-bank-and-financial-accounts-fbar

Although April 15th is the official deadline for filing FBAR/FinCEN 114, there is an automatic 6 month extension to October 15th.



> The Act also mandates a maximum six-month extension of the filing deadline. To implement the statute with minimal burden to the public and FinCEN, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required.


This is from the IRS website page on FBAR deadlines: https://www.irs.gov/businesses/smal...t-of-foreign-bank-and-financial-accounts-fbar
Cheers,
Bev


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## anglo1558

Bevdeforges said:


> To be honest about it, the Free File Fillable forms have not been particularly suited to overseas filers in past years. The first few years they excluded anyone with a "foreign address" altogether. Now I note that there are some "limitations" for form 1116 - though not having filed one of those, I'm not sure how restrictive that particular limitation is for overseas filers. (Something about not being able to include "attachments.")
> 
> And, I note that they do say something specifically about the SSN fields not taking any letters - which kind of rules out filing for those of us married to NRAs with no ITINs.
> 
> Do try the wizard for the free file stuff - though if your AGI is over $62,000 you can't use the program at all. Take a look at some of the computer magazine reviews of the top tax programs to see what's the cheapest you can get away for. Personally, I prefer downloading software to my computer to play around with rather than doing everything "in the cloud."
> 
> As a last ditch, however, most of the pdf forms you download from the Forms and Publications section of the IRS website can be filled in and printed. You have to do the math and all, but generally I just print those off and mail them in. Have tried a couple of times to e-file, but the NRA spouse seems to be the major stumbling block.
> Cheers,
> Bev


Hi Bev! As you're also married to a NRA without an SSN or ITIN, do you just put in NRA in the space for your spouse on the 1040? This is my first time doing this on H&R Block's free file system (although, of course, not free for those of us outside the US who must use the 'Deluxe' package...!) - and the only snag keeping me from filing electronically seems to be this issue with being married to a NRA. Thanks!


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## Moulard

Technically you file married filing separately, put NRA in the spouse SSN field and their name on line 3.

Depending on how you file you may get an error - in which case you are left with printing out the return and posting it in. 

I have heard conflicting accounts of what works and what does not work.


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## Bevdeforges

As Moulard says, you file as "married, filing separately" and you are supposed to put NRA in the space for spouse's SSN. However, it seems as if most of the tax preparation software won't let you do that. And even if they do, in my experience, the IRS e-file system won't accept the forms even if the software lets you do so.

Up to you what you do about the "spouse's name" line. I just put NRA in that one, too, since I know the e-file system won't take my filing, even if I follow their instructions about the "spouse's SSN." Easiest thing to do with all of this is to print off the forms (if the software will allow you to do so - some don't until you have e-filed) and just mail them in. Worst possible case - download the forms from the IRS website and copy from your preparation software to the downloaded forms. (Nearly all the forms on the IRS website these days are pdf "forms" that you can fill in on your computer.)
Cheers,
Bev


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## 1relocator

Hi Bev, snowflake here. 

I've just found out about the tax filing requirements after 10 years living abroad (US citizen but working in Belgium for Belgian company). I need to undergo the streamlined procedure but missed the June 15th auto-extended deadline for filing my 3 years of back taxes. Meanwhile, I am planning to permanently return to the US with my non-US partner (not yet husband) early next year, which means I'd be sponsoring his green card. I've been led to believe that my tax situation would need to be in order, in order for that application to be approved. 

If I attempt to do the streamlined procedure but file my 2014, 15 and 2016 taxes late, I risk being fined for doing it late. But if I wait till next tax season to file, that means postponing my repatriation until such time as the IRS has received, processed and approved my streamlined procedure documents, which could take up to a year, I hear. 

What would you advise in this situation?


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## Bevdeforges

Not really a problem. You can file your 2016 taxes now (still considered the "current" year) with 2015, 2014 and 2013 to follow shortly along with the appropriate Streamlined Procedure stuff. The only fine for filing late is a %age of whatever you owe - which should be $0 or close to it if you make use of the appropriate Foreign Earned Income Exclusion and/or Foreign Tax Credit.

Take a look at IRS Publication 54 (online or download as you prefer) https://www.irs.gov/uac/about-publication-54

Just be aware that there doesn't seem to be a formal "approval" process for the Streamlined program. You submit your filings and then you check online to see if and when they are available as a transcript. Once they are, you're ready to go. 

Assume you're getting married before you start the paperwork for your partner - but that can take 9 to 12 months to process, too. Check over on the US section of the forum, but for sponsoring someone, you may need to have a total of 5 years of past filings (not sure about that - but someone on the US forum will know). In any event, get that 2016 return in and the streamline process stuff moving so that you can file for his visa as soon as you are married. 
Cheers,
Bev


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## 1relocator

Ah, that is a relief! I normally won't owe anything, don't make enough money, thankfully. So no fine! Whew! Thanks also for the link to the pub 54--I wasn't aware that existed, and for the clarity on what happens after filing under the so-called streamlined program. 

Re: marriage, from what we hear, filing from abroad can take aaaaages, compared to filing from inside the US. For that reason we plan to marry in the US, then submit paperwork for him to join me as a permanent resident, with one or 2 trips to Canada while waiting so he doesn't outrun his tourist visa....

Thanks again, will be checking the US forums to see what the others say on that.


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## Bevdeforges

1relocator said:


> Re: marriage, from what we hear, filing from abroad can take aaaaages, compared to filing from inside the US. For that reason we plan to marry in the US, then submit paperwork for him to join me as a permanent resident, with one or 2 trips to Canada while waiting so he doesn't outrun his tourist visa....


Be careful with that plan. It has been YEARS since a hop into Canada works for re-setting a tourist visa or "visa waiver." You may also run afoul of the rules about your "intent" when entering the US. The "by the book" process would allow you to get married in the US, but then the non-US citizen is supposed to go back home while the visa paperwork is being processed. 

The adjustment of status is only supposed to work if the wedding was genuinely "spontaneous" during a visitor stay. And the danger of trying to fake it is that he could win a long-term ban from the US. 

I'd post something over in the US section or at least do a bit of research on the threads about sponsoring a spouse. America Expat Forum for Expats Living in America - Expat Forum For People Moving Overseas And Living Abroad They know the details better than I do - but from everything I've heard, you'd be taking a huge risk if you do things as you currently are planning.
Cheers,
Bev


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## 1relocator

Uh oh! We definitely don't want to get in trouble--I didn't know that wasn't allowed. I guess we'll have to get married first outside the US, and apply from overseas. Will definitely check out the US forum and see what others recommend. Thanks a lot Bev!


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