# Moving back to US - FEIE question



## rav2811 (Nov 28, 2015)

Hello, I am moving back to US after 5 years in the UK. So excited.... I have calculated and made sure that I have spent 330 days in the UK, outside of USA to get foreign earned income exclusion. 

I am moving back on Dec 16th to the parent company. To make sure that there is no lapse in health insurance coverage, my US employer is going to put me on the US payroll starting Dec 16th. So, I will get a W2 for 2015 wages for 15 days. 

Will getting a W2 for 15 days impact my FEIE when I file 2015 taxes? I would have guessed that it does not impact as I can use the 330 days calculation, but thought best to ask the experts in this forum.. 

please share your thoughts..thanx


----------



## Bevdeforges (Nov 16, 2007)

It shouldn't impact your FEIE on salary earned while you were living in the UK. Yes, you will be taxable on those 15 days of income at the end of the year. (I.e. your period outside the US simply ends on Dec. 15th or 16th or whatever day it is that you return to the US). 
Cheers,
Bev


----------



## BBCWatcher (Dec 28, 2012)

And the U.K. will have its own rules about how your U.S. income will be treated. Remember that the current U.K. tax year doesn't end until April 5, 2016. It's likely you'll have what's called a U.K. "split year," and that only the U.S. will tax your U.S. employment income, but check that carefully.

I recommend you run a simulated tax calculation on the U.S. side to determine whether you're better off skipping the Foreign Earned Income Exclusion and just going with the Foreign Tax Credit. "Exit/enter" tax years can be "odd," and you might be better off that way even if you weren't in the past.

A couple other things:

1. If your U.S. employer offers a 401(k) plan (especially if your employer offers matching funds), and if you can afford it, ask your employer to take as much of that two weeks of salary as possible and put it into your 401(k). That will maximize what you can contribute to your 401(k) since the limits are based on calendar years including the limits on employer matches.

2. For future reference, there was probably no need to delay your move back to the U.S. for tax reasons. The Foreign Earned Income Exclusion almost certainly would have covered whatever foreign earned income you had until the date of your move. (It would have been nice to move back earlier to get a stronger U.S. Social Security year in your earnings history for 2015, and to get your disability coverage restarted that much sooner if it lapsed, but that's "water under the bridge.")

Basic rule: don't try to change your behavior for tax reasons unless you _really_ know what you're doing, and even then proceed with caution.


----------



## Bevdeforges (Nov 16, 2007)

Just as a note, that "330 days in any 12 month period" works exactly like that. For the physical presence test (which is what you're using here), you only need to be outside the US 330 days in the rolling 12 month period - so the fact that you've been in the UK for 5 years means you could have moved back mid-year, having fulfilled the requirement for, say, the period from 1 April 2014 to 31 March, 2015. 
Cheers,
Bev


----------



## rav2811 (Nov 28, 2015)

Thanks everyone for your insight. @BBCwatcher, great tip on the 401K contribution. Will follow that. 

Just to clarify, I only had the option to move back a week earlier than Dec 16th. Didn't really have an option to move earlier than Dec.


----------

