# US Tax Headache



## Meepmeepy (Sep 17, 2014)

Sorry to make two threads in one day but my further research on this topic has lead me to be totally confused once again about US taxes for a foreign national and with the deadline looming I want to get clarification.


1/ My spouse came to the UK in August 19th 2016.
2/ She earned income in the US from Jan-August and then UK income from Sep-Dec (and obviously onwards into the next four months of the UK tax year).
3/ My understanding was we needed to apply for a deadline extension to qualify for residence in the UK. So she could say that income earned in the UK could be written off as taxed here when she finally filed her US tax return. 
4/ HOWEVER from what I understand this isn't necessary? Can she claim it back using FTC regardless of the residence? Im struggling to understand this. 
5/ She is self employed / We have a Totalization Agreement Document / She earned a reasonable amount (not exact as I dont want to give away personal details) $30K+ in the US then about 60% of that in her time in the UK up until December.

So should we be just using FTC? What is the difference between doing that instead of going for FEIE? What is the negative of just going for FEIE? 

Thanks in advance, this seems like such a crazy mess.


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## Bevdeforges (Nov 16, 2007)

OK, to take advantage of the FEIE on your 2015 taxes, she won't be able to file her 2015 returns until after her anniversary date of arrival in the UK (so August - give her a couple of weeks, say, September, 2016).

If she wants to take the FTC instead, she can file right away. She just offsets the taxes paid (withheld) in the UK against whatever US tax liability she runs up for 2015. Just remember that she can only use income taxes for the credit (i.e. not social insurances). The big "advantage" in taking the FTC is that if you have excess credits, you can carry them over to subsequent years. The big "disadvantage" is that by not taking the FEIE you may be considered to have "revoked" your option to take it, so you would have to wait at least 2 years to decide to take it (or get permission from the IRS to change her mind like that).

There are other considerations, but IRS publication 54 should have all the explanations you need regarding the details.
Cheers,
Bev


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## Meepmeepy (Sep 17, 2014)

OK! Thank you. Then we will definitely take FEIE 

Which of these do we file? 
https://www.irs.gov/pub/irs-pdf/f4868.pdf 
https://www.irs.gov/pub/irs-pdf/f2350.pdf

or both?


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## Bevdeforges (Nov 16, 2007)

I'd go with the 4868, since that gives you an automatic 6 months, which will take you to October. That should be plenty of time to file after her 1 year anniversary date. (Actually, just prepare the forms now and tuck them away until the end of August.)
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

To clarify, file 4868 now, before April 15. You/she can prepare a U.S. tax return now but wait to sign it and file it until she qualifies for the FEIE. I think the physical presence test requires at least 330 days, actually, so I don't think you have to wait quite as long as one calendar year, assuming zero physical presence in the U.S. since her departure. It should be possible to file as early as sometime in July.

Note that 4868 doesn't extend the deadline to pay, so if she still owes some U.S. tax then she should take her best guess, add a dollar or two, and pay. Then claim back any refund (hopefully small) when she files.


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## Meepmeepy (Sep 17, 2014)

Thanks so much for your help guys, going to have this filed and all paid up by the 15th and then we can do the return in late July. Really appreciated.


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