# Question about US taxes???



## 2jh6lh (Nov 15, 2013)

Hey guys, I'm sorry if this a repeat question or something, but all the previous times I tried to look, I couldn't find any answers for my specific situation on the net.

Alright I'll just jump into it. I moved overseas after quitting my job and filed my taxes as single because that's what I was for the duration of my last job in the US. I have since learned that I should have filed as "married" because that's what I was at the end of the year, when I left. I will be filing an amended return directly.

The major problem I'm having is that I am considering renunciation once I meet the Norwegian residency requirement (another 6 years). Naturally, I need to do my US taxes correctly to the letter to improve my chances of "escaping" unscathed. There are, however, a couple of problems which I can't find the answers to. I live with my husband and do not have a job myself, nor do I earn income. My name is on none of the papers here, and it is not on any bank account or other account. I don't actually know if Norwegians can "claim dependents" on their tax forms or not, but if so, that's what I would be. In such a case, when it asks me on the tax form if I can be claimed as dependent, what shall I say? Does that only include "dependents" on other US tax forms?

My question, then, is: 
- Is it okay for me to not report on any of "our" stuff over here? My name is NOT on anything so I do not own it, even though logically I do because we're married.

A bit more info: when I file an amended return, I think I need to get my husband some kind of "taxpayer ID" or some such thing, and I may have to state the amount in his bank account. I am not sure.

Is there any other advice you can give me? I'm really just trying to go about this the easiest possible way, without having my husband unfairly taxed just for the "privilege" of marrying a US citizen. I know I'm not the first person to hate our stupid tax laws. 
Thank you to anyone who replies.


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## Bevdeforges (Nov 16, 2007)

Ok, things are actually quite a bit simpler than you are worried about. Let's take it one step at a time.



2jh6lh said:


> Hey guys, I'm sorry if this a repeat question or something, but all the previous times I tried to look, I couldn't find any answers for my specific situation on the net.
> 
> Alright I'll just jump into it. I moved overseas after quitting my job and filed my taxes as single because that's what I was for the duration of my last job in the US. I have since learned that I should have filed as "married" because that's what I was at the end of the year, when I left. I will be filing an amended return directly.


Yes, but chances are that amending your return will make absolutely no difference in the end result (i.e. any taxes owed), so it is often the case that they won't accept an amended return. Let it go. A technicality like that really isn't a problem.



> The major problem I'm having is that I am considering renunciation once I meet the Norwegian residency requirement (another 6 years). Naturally, I need to do my US taxes correctly to the letter to improve my chances of "escaping" unscathed.


Not necessarily. You need to have the last five years of tax returns filed. But they aren't going to audit you on them (nor actually do much in the way of "checking them" even) unless you're talking about serious big bucks - in both income and taxes due.


> There are, however, a couple of problems which I can't find the answers to. I live with my husband and do not have a job myself, nor do I earn income.


If your income is less that $3500 or so you are under no obligation to file at all - until and unless you need to "prove" you are up to date for those 5 years prior to your renunciation. 


> My name is on none of the papers here, and it is not on any bank account or other account.


Then you have no obligation to file anything. You need to file an FBAR only if you have foreign (i.e. non-US) bank accounts that exceed $10,000 in total during a given calendar year. 


> I don't actually know if Norwegians can "claim dependents" on their tax forms or not, but if so, that's what I would be. In such a case, when it asks me on the tax form if I can be claimed as dependent, what shall I say? Does that only include "dependents" on other US tax forms?


They are only concerned about your being claimed on someone else's US tax returns (most likely your parents). But as an adult living in Norway, you aren't anyone's dependent.



> My question, then, is:
> - Is it okay for me to not report on any of "our" stuff over here? My name is NOT on anything so I do not own it, even though logically I do because we're married.


Actually, it sounds as if you don't have to file at all for the moment.



> A bit more info: when I file an amended return, I think I need to get my husband some kind of "taxpayer ID" or some such thing, and I may have to state the amount in his bank account. I am not sure.


If you want to claim your husband as a dependent on your tax return (or any of your kids), they will have to have either a US social security number or an ITIN which is what they issue if you aren't eligible for a SSN. You don't need one for your husband if you're simply filing married filing separately - and if you don't actually need to be filing at all, I'd just forget about filing an amended return. (I tried to file an amended return for a friend to "correct" an incorrect status only - no effect on the return - and it was rejected.)



> Is there any other advice you can give me? I'm really just trying to go about this the easiest possible way, without having my husband unfairly taxed just for the "privilege" of marrying a US citizen. I know I'm not the first person to hate our stupid tax laws.
> Thank you to anyone who replies.


If your husband is not a US citizen, then he has no filing obligation and you don't have to report any of his income. Period. If and when you decide to renounce (though honestly, there's not really much reason to do so in your situation unless things change), you will have to show that you are "up to date" on your filings, which often means just backfiling the five years with "no income" returns.

OK, now take a deep breath and relax. It's one big advantage of not having income nor bank accounts/investments in your name - you actually have no filing obligation anyhow.
Cheers,
Bev


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## 2jh6lh (Nov 15, 2013)

Bev:
THANK YOU SO MUCH for your reply. I always appreciate your answers (and I'm sure many do). It was very insightful for me and answers nearly all of my questions.

However....

In the past, I asked my parents many of the same and was told I do not need to file, but being the worrier that I am, and always trying to do things properly, I did some digging.
Do You Need to File a Federal Income Tax Return? (I answered no the first 2 questions and then "married filing separately".)
Judging by that, it seems like I do need to at least file, even if I don't necessarily owe anything. I think it's a recent change in the law, but apparently if you are married you now HAVE to file as married. Or was it always that way?

Anyway, thanks for the reply


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## BBCWatcher (Dec 28, 2012)

I think you're using the wrong IRS questionnaire or at least wrong entry point into their questionnaire. This link should work better for you.

I agree with Bev that it's unlikely you are required to file either a U.S. tax return or FinCEN Form 114 (FBAR) from your description of your circumstances.

One reason why you might want to file a U.S. tax return is if you have a U.S. citizen (or U.S. national) child living at home with you and if you have a modest amount of earned income. In that case you and your child may qualify to collect the Additional Child Tax Credit, worth up to $1000 per child in free money from the IRS.


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## CanadianMoose (Sep 6, 2014)

If you don't jointly own a house or share a bank account with your spouse and you don't have a foreign bank account as you say, you only need to file your regular 1040 for the W-2 you received from your job you quit in the states. If however you do one day get added to the title of the house or open/share a bank account you could be liable for paying taxes on half of the assets you have your name on. If you share a bank account with your spouse, and there is $19,999USD (As per exchange rate) in your account, you only have to file for half of it which would be less than $10,000... so woohoo no FBAR! I would strongly recommend looking over the internet for the Tax Treaty that the US holds with Norway and what you can get out of it for in the future if you do ever make income.


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## BBCWatcher (Dec 28, 2012)

No, that's not correct.

The instructions for FinCEN Form 114 ("FBAR") make no allowance for dividing the account balance among joint account holders for purposes of determining whether you meet the filing threshold. It's solely a financial report. Of course, check the instructions.

You may be confusing FBAR with the IRS's rules for how to treat the interest earnings on a joint account for tax purposes. They're two different concepts with different rules.


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## Bevdeforges (Nov 16, 2007)

I think the wording on that result is particularly misleading.



> You need to file a Federal Income Tax return. Even if you do not have to file a return, you should file one to get a refund of any Federal Income Tax withheld.


As married, filing separately, you only need to file if you have income exceeding $3900 for the year, or self-employment income exceeding $400. Or if you want and are able to claim one of the refundable credits. 

I couldn't get BBC's link to work, but you can find the questionnaire he's referring to by going to the IRS website and searching on "Do I need to file." Be careful because some other questions are misleading for those of us living overseas. Try this link, though I suspect it may have the same problem Do I Need to File a Tax Return? It's just a fact of life that the IRS site contains very little concrete information for overseas residents. What you can do, however, is to take a look at IRS Publication 54 - specifically here, if the link will permit: Publication 54 (2013), Tax Guide for U.S. Citizens and Resident Aliens Abroad

And in the event that you buy a house together with your spouse, you pay no taxes to the IRS on your assets until and unless you sell and have a capital gain, and even then you're entitled to the first $250,000 in gain tax free on the sale of your primary residence, subject to a few conditions. If your gain isn't above that figure, you don't even have to file a tax return on it. (And that's true from within the US as well as outside.)
Cheers,
Bev


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## 2jh6lh (Nov 15, 2013)

Thanks again. 

I couldn't get BBC's link to work either, but yours did, Bev. So I guess I don't need to file after all. Awesome.

We are planning on moving, but since we're aware of the crappy US tax situation, my name won't be on that house either, so technically it won't be an asset of mine. Would I still need to report after selling this one? I'm 90% sure it's over $250k.


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## Bevdeforges (Nov 16, 2007)

No, if you're name isn't on the house, there's nothing to report on the sale. But even if you did have a half interest, you'd only report half the gain anyhow (if "your" half exceeded the $250,000 exemption). However, unless you had some other significant items on your tax return at the same time, it's unlikely the IRS is going to bother to check on you anyhow.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

And the taxable gain is your share of the _net_ gain amount above the $250,000 exemption, assuming you qualify for the exemption. That word net is very important! It's not simply subtracting the purchase price from the selling price. You get to take out all sorts of expenses you paid along the way, and it's not uncommon -- especially nowadays -- for that math to work out to a capital loss.

In short, this is a much bigger tax exemption than the "headline" $250,000 figure suggests.

Not being required to file a U.S. tax return and owing zero U.S. income tax doesn't sound crappy at all, by the way. Indeed, it's hard to imagine how you'd ever owe even one dollar of U.S. income tax when living in Norway unless you have U.S. source income. The U.S. is even going to take into account your comparatively high Norwegian income tax and let you "bank" those higher taxes as credits to offset possible future U.S. income tax, up to 10 years into the future from your Norwegian tax years. And on top of all that, you might qualify for the occasional free money from the IRS just for being a U.S. citizen (who happens to work and live in Norway), like the 2009 and 2010 Making Work Pay Tax Credit. All that really, really isn't crappy!


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## 2jh6lh (Nov 15, 2013)

Thanks again, both of you, for your great replies 

You've really put my mind at ease now.


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## jbr439 (Nov 17, 2013)

Bevdeforges said:


> No, if you're name isn't on the house, there's nothing to report on the sale. But even if you did have a half interest, you'd only report half the gain anyhow (if "your" half exceeded the $250,000 exemption). However, unless you had some other significant items on your tax return at the same time, it's unlikely the IRS is going to bother to check on you anyhow.
> Cheers,
> Bev


Out of curiosity, if a married couple lives in a common property jurisdiction, would it be the case that it doesn't matter whether one of the spouses' name is not on the house, and that as far as the IRS is concerned there's 50-50 ownership?


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## Nononymous (Jul 12, 2011)

Quite apart from the larger question of how would the IRS know about Norwegian property ownership, of course.


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## Bevdeforges (Nov 16, 2007)

jbr439 said:


> Out of curiosity, if a married couple lives in a common property jurisdiction, would it be the case that it doesn't matter whether one of the spouses' name is not on the house, and that as far as the IRS is concerned there's 50-50 ownership?


As Nononymous says, how would the IRS even know? But also, there are all sorts of details to take into account.

Normally, where I live (France) is a community property system - however, you have the option of marrying with a "contract" which includes a couple variations on the basic theme and an option to choose separate maintenance (i.e. he who pays for it, owns it). Plus, due to the elaborate rules here on inheritance, if the family home is paid for with the inheritance of one spouse, then the house belongs to that spouse, no matter what.

It's highly unlikely the IRS is going to mess with someone over what would be at most a couple thousand in disputed taxes (especially in a high tax country like Norway).

When it comes to taxes, first of all there is no one "right" answer - everything in tax (and other) law in the US is subject to interpretation. Secondly, there is what is "technically" correct and what "will fly" - it's definitely a "render unto Caesar" kind of thing.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

I'm pretty sure the IRS only considers common property _state_ laws within the U.S. for these purposes. Double check me on that, of course.


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## Bevdeforges (Nov 16, 2007)

BBCWatcher said:


> I'm pretty sure the IRS only considers common property _state_ laws within the U.S. for these purposes. Double check me on that, of course.


It was a while back that I had reason to check this out, but officially (technically) it depends on the default scenario in your country of residence. Usually this refers to the financial "split" on either divorce or the death of one of the spouses. But in practice, they pretty much allow you to make whatever reasonable assumptions you want.

They really are looking for tax evaders and thus only are concerned with income you receive in your own name. Even the IRS is sometimes "reasonable" in its approach to these things.
Cheers,
Bev


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