# USA Taxes due while in OZ...??



## vbrown99 (Feb 1, 2009)

The US is one of the few countries where it's citizens are on the hook for filing and paying income taxes while living abroad (I understand the only other country is Syria...). 

Does anyone have a good CPA contact in Oz, who knows the US tax code in regards to US citizens living in Oz? 

I don't wanna try to deal with an accountant here in the States when trying to file my tax return every year... 

3 months, 22 days... but who's counting?? 

Thanks!


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## amaslam (Sep 25, 2008)

I don't have an accountant but I went with H&R Block. Since they have a strong presence in both countries they can do the taxes just fine. They'll file for all the exemptions for foreign income and housing, or extensions that allow you to get more exemptions. Also your filing date is automatically extended to June 15th (instead of April) as you are outside the US, you may also file forms to extend the filing date past June 15th as well (I did one year when I filed sometime in September).



vbrown99 said:


> The US is one of the few countries where it's citizens are on the hook for filing and paying income taxes while living abroad (I understand the only other country is Syria...).
> 
> Does anyone have a good CPA contact in Oz, who knows the US tax code in regards to US citizens living in Oz?
> 
> ...


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## interplanetjanet (Jan 7, 2009)

Amaslam, what are the fees for tax preparation here? Do they charge a percentage? Is it possible to have your taxes done here but the refund go into your US account?


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## amaslam (Sep 25, 2008)

When I did it the one time (it's easier after the first year) they charged about AU$230. I'm fairly sure a CPA or global accountancy (i.e. PWC) would charge way more. 

I don't think they charge a percentage, it's usually on a time basis (how long it took to prepare the return). 

Should be no problem to get the refund put into your US bank account, as the return is still mailed and filed in the US, just your mailing address is overseas. I usually get my refunds deposited electronically like all my US returns (before or after moving out of the US).



interplanetjanet said:


> Amaslam, what are the fees for tax preparation here? Do they charge a percentage? Is it possible to have your taxes done here but the refund go into your US account?


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## interplanetjanet (Jan 7, 2009)

Thanks!

I had a big argument with my husband last night about doing taxes. He doesn't think he should have to report his Australian income to the US at all (he's got PR). I tried to explain to him that a treaty means we won't get taxed twice, but he still thinks it's pointless. He just wants to be able to do his taxes himself and not have to pay someone.


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## amaslam (Sep 25, 2008)

You can do it yourself. It's just that the first year has the fractional calculations based on the number of days in the US and number of days outside the US and they have to be applied to the deductions, exemptions, etc. , it's difficult to get it right if you haven't done them before. 

After the first year it's much easier as you can refer to the previous year for the forms and you don't have fractional calculations. 

Oh you both have to file and report all income (worldwide), once you're a PR or US Citizen of the US it's file taxes for life, and if your kids are PR or US Citizens they will also have to once they're adults (even if they've never lived in the US).

It's still pretty much 'honor system' but with the IRS you never know what data they have access to. 




interplanetjanet said:


> Thanks!
> 
> I had a big argument with my husband last night about doing taxes. He doesn't think he should have to report his Australian income to the US at all (he's got PR). I tried to explain to him that a treaty means we won't get taxed twice, but he still thinks it's pointless. He just wants to be able to do his taxes himself and not have to pay someone.


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## vbrown99 (Feb 1, 2009)

H&R Block- great to hear. We've been using them online for the last few years with relative success.  

As always, Thanks for the reply!


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## matjones (Jan 30, 2009)

vbrown99 said:


> H&R Block- great to hear. We've been using them online for the last few years with relative success.
> 
> As always, Thanks for the reply!


Glad to hear that too about HR Block, I've done my taxes online with them for many years. Glad they have AU offices.


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## Bevdeforges (Nov 16, 2007)

interplanetjanet said:


> Thanks!
> 
> I had a big argument with my husband last night about doing taxes. He doesn't think he should have to report his Australian income to the US at all (he's got PR). I tried to explain to him that a treaty means we won't get taxed twice, but he still thinks it's pointless. He just wants to be able to do his taxes himself and not have to pay someone.


FWIW, lots of folks think the same way your husband does. However the laws in the US trump "common sense." 

The IRS has been known to share tax information with the tax authorities in countries with which the US has its tax treaties. You don't hear about it too often, but I'm told that they often check past tax returns for those recently deceased overseas - which can lead to seizure of various assets destined for the heirs.

The other risk you run by not declaring foreign income is that the statute of limitations doesn't start running until you have declared the income. So, if you declare it and "get away with" your tax treatment (excluding or taking deductions against, for example) you're home free after 4 years - or whatever the current statute is on taxes. If you don't declare it, they can re-open your case 10 or 20 years down the road based on undeclared income.
Cheers,
Bev


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## TraceisOzBound (Mar 11, 2011)

I have been doing my taxes on hr block online in the US for years. I am moving to Australia. Will I be able to file the same way? Will they be able to direct deposit into an Australian account or does it have to be a US account?


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## Bevdeforges (Nov 16, 2007)

TraceisOzBound said:


> I have been doing my taxes on hr block online in the US for years. I am moving to Australia. Will I be able to file the same way? Will they be able to direct deposit into an Australian account or does it have to be a US account?


Um, the answer is a firm "maybe." If you're using the HR Block freebie e-file service, you'll have to see if you qualify from overseas. Some of the free file sites will only allow filers from specific states (and usually that means you have to pay to file the state return). Since you have no state return to file once you're resident overseas, that could pose a problem. Other sites that say you can file from a foreign address put age limitations on. List of free file sites.  (If this link doesn't work for you, go to the IRS website (www.irs.gov) and click on the "free file" logo on the right side of the page.

If you're paying to e-file, you should check with Block. Usually there's no real problem, but it's a matter of their company policy more than anything else.

You won't be able to direct deposit any refund in an Australian account, though. Probably a good idea to keep one US account open - both to make tax payments (has to be US $) and to receive any refunds you may be due.
Cheers,
Bev


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## suzer (Mar 10, 2011)

It may be good to check with the American Consulate in Oz as they would have info on taxes and accountants. The US is not one of the only countries who require citizens to file while living abroad - many do, which is why most countries have agreements that allow for foreign earned income exemptions. It's all pretty easy - have always done by own taxes. There are just some extra forms to fill in, and you won't end up paying taxes to the US if you don't live and earn there.


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## Andrew James (Nov 6, 2010)

amaslam said:


> When I did it the one time (it's easier after the first year) they charged about AU$230. I'm fairly sure a CPA o*r global accountancy (i.e. PWC)* would charge way more.
> 
> I don't think they charge a percentage, it's usually on a time basis (how long it took to prepare the return).
> 
> Should be no problem to get the refund put into your US bank account, as the return is still mailed and filed in the US, just your mailing address is overseas. I usually get my refunds deposited electronically like all my US returns (before or after moving out of the US).


Hi,

I always smile when I read posts like this. I'm a former PwC US expatriate tax manager and, for the sake of clarity, you would need to take the fee you've quoted and multiply it by over 13! It's not really a time spent issue, it's that you are having highly qualified people with specialist know how preparing your return.

The day that H&R Block understand that intricacies of a section 402(b) non-compliant pension fund will be the day that I accept that expatriate returns are straight forward and easy, and that the same fees as people paid in the US are valid in Australia.

Best,

Andrew


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## Bevdeforges (Nov 16, 2007)

Andrew Landin said:


> The day that H&R Block understand that intricacies of a section 402(b) non-compliant pension fund will be the day that I accept that expatriate returns are straight forward and easy, and that the same fees as people paid in the US are valid in Australia.


Andrew, to be fair (and I used to work for PW, back before it became PwC), it all depends on the circumstances of the taxpayer just how complicated the expat returns may be.

For someone living on their salary, with few or no financial resources left back in the US, it's a waste of time and money to pay to have US tax returns prepared. The first year is usually the tricky one because you actually have to read most of Pub. 54 (and it helps to have Pub. 17 handy, too), but after that things go pretty quickly. (I average about 15 to 20 minutes to do my US returns each year now that I know the drill - and I'm not drawing much on my CPA training or experience.)

With more complex financial holdings (pension funds back in the US and the like) the situation changes and it's up to the individual to decide just how much it's worth to them to have someone else prepare their returns. Frankly, there's a fear factor (IMO) in the US that drives people to Block and the other storefront tax preparers.
Cheers,
Bev


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## Andrew James (Nov 6, 2010)

Bevdeforges said:


> Andrew, to be fair (and I used to work for PW, back before it became PwC), it all depends on the circumstances of the taxpayer just how complicated the expat returns may be.
> 
> For someone living on their salary, with few or no financial resources left back in the US, it's a waste of time and money to pay to have US tax returns prepared. The first year is usually the tricky one because you actually have to read most of Pub. 54 (and it helps to have Pub. 17 handy, too), but after that things go pretty quickly. (I average about 15 to 20 to do my US returns each year now that I know the drill - and I'm not drawing much on my CPA training or experience.)
> 
> ...


Hi Bev,

You make some very fair points. But I do wonder what H&R Block would say about superannuation; apart from "what's that?"...

Best,

Andrew


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## Bevdeforges (Nov 16, 2007)

Andrew Landin said:


> You make some very fair points. But I do wonder what H&R Block would say about superannuation; apart from "what's that?"...


Haven't checked, but I suspect Block may be one of those "free file" sites that doesn't offer their services to those with a foreign address.

But the big mystery at the moment is that nearly all the "free file" sites that do accept foreign addresses limit their services to those under the age of 51. Any idea what that's about?
Cheers,
Bev


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## Andrew James (Nov 6, 2010)

Bevdeforges said:


> Haven't checked, but I suspect Block may be one of those "free file" sites that doesn't offer their services to those with a foreign address.
> 
> But the big mystery at the moment is that nearly all the "free file" sites that do accept foreign addresses limit their services to those under the age of 51. Any idea what that's about?
> Cheers,
> Bev


Hi,

I have no idea because i can't think of credits etc that get affected so I'm just guessing that they've done some studies and worked out that the largest demographic is over 51 so they let the others file free and charge the rest? I remember reading someone about only 10 to 15% of people being able to use their "free" 1040-EZ product so people walk in expecting a free Federal tax return only to find out they don't qualify.

I guess it's like any business...you really need to check the deliverable you're going to receive to make sure it's in line with what's advertised!

I was just doing a tax return this morning and I was hoping to e-file but because the client chooses to file MFS with a NRA spouse (no ITIN), I can't; and I struggle to understand why the efile system cannot accommodate such returns meaning we have to go with the paper option which is just a hassle for everyone.


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## Bevdeforges (Nov 16, 2007)

Andrew Landin said:


> I was just doing a tax return this morning and I was hoping to e-file but because the client chooses to file MFS with a NRA spouse (no ITIN), I can't; and I struggle to understand why the efile system cannot accommodate such returns meaning we have to go with the paper option which is just a hassle for everyone.


Ah, you've hit on my favorite grouse. You would think they'd want those of us with dead easy returns, no taxes payable, living overseas to e-file. That makes life easy (and cheap) for everyone concerned - including the IRS. But no - filing MFS with an NRA spouse seems to be the one category that absolutely precludes e-filing on just about every system I've tried.
Cheers,
Bev


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## Andrew James (Nov 6, 2010)

Bevdeforges said:


> Ah, you've hit on my favorite grouse. You would think they'd want those of us with dead easy returns, no taxes payable, living overseas to e-file. That makes life easy (and cheap) for everyone concerned - including the IRS. But no - filing MFS with an NRA spouse seems to be the one category that absolutely precludes e-filing on just about every system I've tried.
> Cheers,
> Bev


Absolutely! The trick, of course, if you have a qualifying dependent is to file as head of household on the basis you are considered unmarried due to your spouse being an NRA...but sadly my client's daughter is now too old, so paper it is...

Best,

Andrew


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## Bevdeforges (Nov 16, 2007)

Andrew Landin said:


> Absolutely! The trick, of course, if you have a qualifying dependent is to file as head of household on the basis you are considered unmarried due to your spouse being an NRA...but sadly my client's daughter is now too old, so paper it is...


Yeah, and they won't let me take either my donkeys or my cats as dependents, cause they don't have US citizenship....:noidea:
Cheers,
Bev


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## Andrew James (Nov 6, 2010)

Bevdeforges said:


> Yeah, and they won't let me take either my donkeys or my cats as dependents, cause they don't have US citizenship....:noidea:
> Cheers,
> Bev


Can you attach a little green card around their necks?


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## SteveOdem (Jan 23, 2012)

Bevdeforges said:


> FWIW, lots of folks think the same way your husband does. However the laws in the US trump "common sense."
> 
> The IRS has been known to share tax information with the tax authorities in countries with which the US has its tax treaties. You don't hear about it too often, but I'm told that they often check past tax returns for those recently deceased overseas - which can lead to seizure of various assets destined for the heirs.
> 
> ...



I agree. In arguments some 4 years ago, former Supreme Court Justice Souter observed to the effect that nowhere is it written that taxes must be either logical or reasonable. 

The US-Australian Tax Treaty specifically provides for exchange of tax information, and computers work well with that. 

Not filing can be a Federal felony if IRS chooses to go that route. Does the husband want to be on the evening news? Not pleasant.


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## mbc71 (Dec 30, 2011)

*Glad to see this post*

I've been wondering how to go about filing abroad... glad to see this post, tks! 

One weird thing for us is that I'm from the US, my husband is not (he's a UK citizen). So although we file as married-filing-together now (while we're state-side), I think for 2012 taxes we may have to file separately (because he would only have to declare his US income up until we leave the US... where I have to declare my US income and my income from Oz). 

 We're nothing if not complicated.


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## SteveOdem (Jan 23, 2012)

mbc71 said:


> I've been wondering how to go about filing abroad... glad to see this post, tks!
> 
> One weird thing for us is that I'm from the US, my husband is not (he's a UK citizen). So although we file as married-filing-together now (while we're state-side), I think for 2012 taxes we may have to file separately (because he would only have to declare his US income up until we leave the US... where I have to declare my US income and my income from Oz).
> 
> We're nothing if not complicated.


Does your husband have, or has he ever had, a green card (not really green - they used to be)???

The answer goes to his filing.


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## Bevdeforges (Nov 16, 2007)

mbc71 said:


> I've been wondering how to go about filing abroad... glad to see this post, tks!
> 
> One weird thing for us is that I'm from the US, my husband is not (he's a UK citizen). So although we file as married-filing-together now (while we're state-side), I think for 2012 taxes we may have to file separately (because he would only have to declare his US income up until we leave the US... where I have to declare my US income and my income from Oz).
> 
> We're nothing if not complicated.


You may want to take a look over in the Expat Tax section. Because of the somewhat "unique" requirements for US taxes, we've opened a section for all expat tax issues - and it just so happens that the US filing requirements tend to provide the bulk of the posts over there. Expat Tax - Expat Forum For Expats, For Moving Overseas And For Jobs Abroad
Cheers,
Bev


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## stormgal (Sep 30, 2009)

In 2014 with the implementation of the FAT-CAT, I mean FATCA, they'll start looking into your overseas bank accounts to see if you're in compliance :juggle:

Foreign Account Tax Compliance Act - Wikipedia, the free encyclopedia


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## mbc71 (Dec 30, 2011)

SteveOdem said:


> Does your husband have, or has he ever had, a green card (not really green - they used to be)???
> 
> The answer goes to his filing.


No, he does not have a green card in the US.


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## SteveOdem (Jan 23, 2012)

mbc71 said:


> No, he does not have a green card in the US.


You are both resident in the US, he as a resident alien. You must always file 1040 with your world-wide income, subject to credits, deductions and exemptions.

For 2012, assuming you move overseas, he will have a split tax year, with 1040 filing to the date you leave the US for your global income and his US income (May need a sailing permit but that's another discussion), and 1040-NR for from that date to the end of the year for him with his US source income only.

Depending on the numbers, which won't be known until after the end of the year, either you can file separate, which will be clean, given the above, or together with his world-wide income.

Again, the numbers for both of you at the end of the year will be key to determining your filing status.

Cheers, mate ! ! !


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