# US taxes in UK questions



## nkb535 (Apr 27, 2012)

Hi. I am a US citizen who moved to the UK on June 22, 2013. I worked in both countries. I know that I get the automatic 2 month extension to file, but I want to also use the additional 4 month extension (Form 4868) to push me over the 12 month requirement for bona fide residency so that I can get the FEIE (I will meet the physical presence test requirements).

What I am confused about is how I actually get this extension. Publication 54 says that I "have to request the additional 4 months by the new due date allowed by the 2-month extension." So, to get the additional 4 months, is this the correct order of events:

#1: at some time before June 14, calculate my taxes owed or refunded on TurboTax or some other software as though it were after June 22 (and I therefore qualify for FEIE). Make sure not to actually submit them.

#2: Fill out and send in Form 4868 and pay the amount calculated in #1. 

#3: Sometime after June 22 (when I will have been in the UK for 12 months), hit the 'submit' button on whatever tax software I used to officially file them.

Is that correct? It just seems a bit like putting the cart before the horse to just give money to the IRS before I have actually filed the taxes. 

Also, will I be able to to #2 online? I quickly looked at TurboTax and Form 4868 is no longer available because it is after April 15, but based on what I read in Publication 54, I should still be able to file it.

thanks in advance for any advice!

cheers,
Nora


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## Bevdeforges (Nov 16, 2007)

Almost. Let me point out a couple minor problems in your plan.



nkb535 said:


> Hi. I am a US citizen who moved to the UK on June 22, 2013. I worked in both countries. I know that I get the automatic 2 month extension to file, but I want to also use the additional 4 month extension (Form 4868) to push me over the 12 month requirement for bona fide residency so that I can get the FEIE (I will meet the physical presence test requirements).


Basically yes, but if you file after June 22, 2014 you'll be filing for the FEIE under the Physical Presence test, not Bona Fide residence. Bona Fide residence requires one entire calendar year of living outside the US. There's not a whole lot of difference between the two, other than the "problem" created if you don't make your 330 days outside the US during your 12 consecutive month period of qualification. (Say, you go back to visit for a total of 60 days.)



> #1: at some time before June 14, calculate my taxes owed or refunded on TurboTax or some other software as though it were after June 22 (and I therefore qualify for FEIE). Make sure not to actually submit them.


OK - that works.



> #2: Fill out and send in Form 4868 and pay the amount calculated in #1.


One small problem: Although you receive an automatic extension for filing until June 15th, the interest on any amounts due start accruing as of April 15th. not the extended filing deadline.


> #3: Sometime after June 22 (when I will have been in the UK for 12 months), hit the 'submit' button on whatever tax software I used to officially file them.
> 
> Is that correct? It just seems a bit like putting the cart before the horse to just give money to the IRS before I have actually filed the taxes.


In the US, that's called either "withholding" or "estimated taxes" - you do have to have paid your full tax obligation by April 15th if you hope to avoid interest charges. 



> Also, will I be able to to #2 online? I quickly looked at TurboTax and Form 4868 is no longer available because it is after April 15, but based on what I read in Publication 54, I should still be able to file it.


If Turbo Tax won't let you file electronically, just download the form from the IRS website and mail it in. It's not absolutely necessary, but you might want to also mail in the change of address form at the same time (form 8822). Check some of the other tax prep software sites. I think they may let you submit a 4868 after April 15th, no problem.
Cheers,
Bev


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## nkb535 (Apr 27, 2012)

Thanks so much, I'm pretty sure I understand now.

I do have one more question about bona fide resident/physical presence. On June 15, 2014 I will have been out of the US for 358 days. So, if I wanted to file my taxes before June 15, 2014, would I still quality for FEIE? I saw that I need to be out of the US for 330 days out of a 12 month period, so is there any reason why that 12 month period can't start on, say, June 15, 2013 which means that from June 15, 2013 through June 14, 2014 I will have been in the US for 7 days and out for 358, thereby exceeding the 330 day threshold?


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## DavidMcKeegan (Aug 27, 2012)

As long as you have been abroad for 330 days, you are ok to file. I would do as you said, use June 15th to June 15th as your physical presence test "year", and then file on the 16th of June (expat taxes are technically due on the 16th for this year).

You will only receive a prorated exclusion amount, but it is better than nothing!

Bev is right as well, interest will start accruing on any unpaid taxes after the 15th of April, so you should make an estimated payment soon to avoid any additional charges.

Hope this helps!


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## nkb535 (Apr 27, 2012)

Thanks, David. 

Can you explain in more detail what you mean by prorated exclusion amount? I guess I don't understand why my exclusion amount would be prorated if I pass the physical presence test. Will it be prorated based on me only being out of the US for 359 days (June 22-June 15)?


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## BBCWatcher (Dec 28, 2012)

Folks, this is not quite correct. If you follow the overseas residence statement procedure described in IRS Publication 54 then any final, closing tax payment ordinarily due by April 15 then becomes due June 15 with no interest or penalty added. (This year it's June 16. That's the receipt date at the IRS, not when you send it, unless you use one of the specific couriers and classes of service the IRS has authorized.)

What that extended June 15th filing date doesn't do is help (much) if you didn't make sufficient, timely estimated tax payments during the course of the tax year and you should have. That clock started some time ago for tax year 2013 -- well before April 15. That's a separate problem that you either have or don't have already, and if you were late then you should pay that estimated tax as soon as you can.


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## Bevdeforges (Nov 16, 2007)

It depends - (like, always?) - by April 15th, you need to have paid up your "safe harbor" amount - which means something like 90% of your actual taxes due for the year or 100% of what your taxes were for the prior year.

Publication 505 has the details.
Cheers,
Bev


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## DavidMcKeegan (Aug 27, 2012)

nkb535 said:


> Thanks, David.
> 
> Can you explain in more detail what you mean by prorated exclusion amount? I guess I don't understand why my exclusion amount would be prorated if I pass the physical presence test. Will it be prorated based on me only being out of the US for 359 days (June 22-June 15)?


Hi,

Well since you were not abroad for the 2013 "tax year" for the full 330 days, you will only receive a portion of the FEIE for the days actually abroad in 2013. Even though two different tax years are used to qualify you for the FEIE, you are still only allowed to count time for the 2013 tax year.

Below in an example straight from the IRS:

You are physically present and have your tax home in a foreign country for a 16-month period from June 1, 2012, through September 30, 2013, except for 16 days in December 2012 when you were on vacation in the United States. You figure the maximum exclusion for 2012 as follows.

Beginning with June 1, 2012, count forward 330 full days. Do not count the 16 days you spent in the United States. The 330th day, May 12, 2013, is the last day of a 12-month period.

Count backward 12 months from May 11, 2013, to find the first day of this 12-month period, May 12, 2012. This 12-month period runs from May 12, 2012, through May 11, 2013.

Count the total days during 2012 that fall within this 12-month period. This is 234 days (May 12, 2012 – December 31, 2012).

Multiply $95,100 (the maximum exclusion for 2012) by the fraction 234/366 to find your maximum exclusion for 2012 ($60,802).

You figure the maximum exclusion for 2013 in the opposite manner.

Beginning with your last full day, September 30, 2013, count backward 330 full days. Do not count the 16 days you spent in the United States. That day, October 20, 2012, is the first day of a 12-month period.

Count forward 12 months from October 20, 2012, to find the last day of this 12-month period, October 19, 2013. This 12-month period runs from October 20, 2012, through October 19, 2013.

Count the total days during 2013 that fall within this 12-month period. This is 292 days (January 1, 2013 – October 19, 2013).

Multiply $97,600, the maximum limit, by the fraction 292/365 to find your maximum exclusion for 2013 ($78,080).


I hope this clears things up


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## BBCWatcher (Dec 28, 2012)

No, by January 15 (or by February 2 if filing and paying your entire balance due) you need to satisfy the applicable safe harbor to avoid paying interest and/or penalties. (And you also are required to have paid sufficient estimated tax payments prior to that last installment.)

The remaining tax balance above safe harbor (i.e. above required estimated tax payments) is due either April 15 or June 15, the latter if you live overseas and attach an appropriate statement with your filing.

There is no payment due date on April 15 if you live overseas and attach the statement. It's only the estimated tax payment deadlines (same as everyone) then June 15.


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