# Filing tax the year of renunciation- file single or jointly?



## Macchia (Feb 19, 2019)

Hi everyone, I'm renouncing US citizenship this year in December. Normally my husband and I (also a dual citizen) file married filing jointly. I'm obviously filing for almost the entire year- am I ok to file married filing jointly this year and then he just files moving forward? Or do we both have to file married filing singly this year?

Thank you|!


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## Bevdeforges (Nov 16, 2007)

In the grand scheme of things, it won't really matter. If you want to file jointly (and have been doing so for a while), technically you just file jointly for the period up to the date of your renunciation, and then you file a part-year NRA return for the part of the year after your renunciation date. But if you're renouncing in December it won't make any real difference. (I renounced in early January - and so figured my prior year return to be my final return. Never heard anything further about it - and filed the form 8854 toward the end of the year in which I renounced (i.e. as soon as the forms dated for my year of renunciation became available).


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## JustLurking (Mar 25, 2015)

Bevdeforges said:


> In the grand scheme of things, it won't really matter. If you want to file jointly (and have been doing so for a while), technically you just file jointly for the period up to the date of your renunciation, and then you file a part-year NRA return for the part of the year after your renunciation date. ...


I am pretty sure that's infeasible. Part year MFJ is not an option for dual-status filers. Also unavailable for dual status are use of the standard deduction and HOH. From the IRS: Taxation of Dual-Status Aliens


> *Restrictions for Filing Dual-Status Tax Returns*
> The following restrictions apply if you are filing a tax return for a dual-status tax year:
> 
> *You cannot use the standard deduction* allowed on Form 1040, U.S. Individual Income Tax Return. However, you can itemize certain allowable deductions.
> ...


From the sound of things, the OP would be best off having their husband file a joint 1040 return with election for NRA spouse to be treated as a US taxable person. Since the OP was in fact a US taxable person anyway for nearly the entire year, then as long as there's no significant financial event in between renouncing and Dec 31, and which it would be best kept entirely out of the grasp of the IRS, that seems like it will generate the best result.

From later years, unless there's a compelling case for MFJ (and the fact that the OP is renouncing suggests not!), the husband files MFS, and the OP files either nothing, or a 1040-NR if needed.


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## Bevdeforges (Nov 16, 2007)

JustLurking said:


> Since the OP was in fact a US taxable person anyway for nearly the entire year, then as long as there's no significant financial event in between renouncing and Dec 31, and which it would be best kept entirely out of the grasp of the IRS, that seems like it will generate the best result.


That was basically my point. Hardly any real reason to file an NRA return for the last few days of the year - or as in my case, no reason to file anything for the first few days of January before my renunciation appointment. If the OP is receiving any income from the US after the renunciation date, it should have 30% NRA tax withheld going forward. (I'm thinking mostly US SS and/or any IRA or other retirement program benefits.) The consulate should handle contacting the US SS Admin as part of the renunciation process. If you have an IRA or 401K or something similar (considered a "government issued pension" in many countries), send the financial institution holding the account a copy of your CLN and a filled out W-8 BEN and then it's up to them.


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## JustLurking (Mar 25, 2015)

Bevdeforges said:


> If the OP is receiving any income from the US after the renunciation date, it should have 30% NRA tax withheld going forward. (I'm thinking mostly US SS and/or any IRA or other retirement program benefits.)


Assuming the OP is a UK resident, absolutely not the case at all.

Under the US/UK tax treaty, there is no US tax withholding or US tax liability on either SS payments or IRA/401k withdrawals made to UK residents who are US nonresident aliens. Also, zero UK tax on US source interest and capital gain. The only US tax withholding a UK resident US NRA should see would be 15% on any US source dividend payments.


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## Macchia (Feb 19, 2019)

I'm moving all of my money and investments over before renouncing, and I don't think I'll be getting SS payments from the US- I've worked most of my working life in the UK. The only thing is there's an inherited annuity of about $300 a month that's from the US- does anyone know if that will be subject to withholding, or will I have to file a 1040NR because of it?


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## Macchia (Feb 19, 2019)

Macchia said:


> I'm moving all of my money and investments over before renouncing, and I don't think I'll be getting SS payments from the US- I've worked most of my working life in the UK. The only thing is there's an inherited annuity of about $300 a month that's from the US- does anyone know if that will be subject to withholding, or will I have to file a 1040NR because of it?


Oh, and just to qualify- I am a UK resident (have been for 12+ years) and I will not be a covered expatriate. Thanks everyone!


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## Bevdeforges (Nov 16, 2007)

Macchia said:


> The only thing is there's an inherited annuity of about $300 a month that's from the US- does anyone know if that will be subject to withholding, or will I have to file a 1040NR because of it?


Depending on who (i.e. what financial institution) is holding the annuity, if they withhold the "proper" amount for a NRA beneficiary, you shouldn't have to file any sort of NR returns. You may want to notify the annuity holder when your renunciation goes through - and give them a copy of your CLN and a W8-BEN form. If they over or under withhold, then you may have to file an NR return to claim back the overage. (Honestly, I wouldn't worry about it if they underwithhold for any reason.)


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## Macchia (Feb 19, 2019)

Thanks Bev!


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