# Filing US taxes after moving to Australia



## interplanetjanet (Jan 7, 2009)

My husband and I moved to Australia a few months ago after living in the US for the last few years. I'm trying to sort out how to do our 2008 US taxes. I'm a US citizen, and he's an Australian citizen. It's my understanding that Australia has no tax treaty with the US, so technically as a US citizen I should be double taxed on any income earned in Australia

As a US citizen, I'm obliged to pay US taxes even while living abroad, however I'm not working in Australia (I was in the US). Since my husband isn't a US citizen, I think he should have no obligation to pay taxes in the US on his Australian income. I'm guessing that it should be sufficient for us to file separately so as to avoid having to pay US taxes on the income he earned in 2008 in Australia. Then I would just pay taxes on my US income (since I have no Australian income), and he would pay taxes in the US on his US income and in Australia on his Australian income.

Anyone have any experience with this? If so, does what I said above work?

Thanks in advance for any help!


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## Dolly (Feb 17, 2008)

Hi there,

Welcome to the forum (and I love your username!).

Sorry I can't help re the tax situation, hopefully another member will be able to give you some advice.

I noticed your location is Mornington Peninsula, so is ours.... we're in Frankston South.

Dolly


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## interplanetjanet (Jan 7, 2009)

Hi Dolly! Thanks for the welcome. 

Yes, we're currently about 20 minutes south of Frankston, but we're moving to Bonbeach in the next couple weeks. Hi neighbor!


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## amaslam (Sep 25, 2008)

Hi:

I'm a U.S. Citizen. Australia does have a tax treaty with the US and you will not be double taxed . Here is the link:
Australia - Tax Treaty Documents

You are obliged to "file" a tax return every year as you are an American Citizen, however there are exemptions (first $80000 US) so you don't always 'pay' tax.

I recommend reading this document from the IRS:
U.S. Citizens and Resident Aliens Abroad

I really recommend you consult a tax professional. If your husband has ever been a Permanent Resident of the US then he must also file. In Australia I went with H&R Block for the first year as they did the tricky partial year calculations (i.e. 44/365 * deduction or 44/365 * income, etc.). 

Good luck 

***
And it's true what they say about two certain things in life: death and ----- 



interplanetjanet said:


> My husband and I moved to Australia a few months ago after living in the US for the last few years. I'm trying to sort out how to do our 2008 US taxes. I'm a US citizen, and he's an Australian citizen. It's my understanding that Australia has no tax treaty with the US, so technically as a US citizen I should be double taxed on any income earned in Australia
> 
> As a US citizen, I'm obliged to pay US taxes even while living abroad, however I'm not working in Australia (I was in the US). Since my husband isn't a US citizen, I think he should have no obligation to pay taxes in the US on his Australian income. I'm guessing that it should be sufficient for us to file separately so as to avoid having to pay US taxes on the income he earned in 2008 in Australia. Then I would just pay taxes on my US income (since I have no Australian income), and he would pay taxes in the US on his US income and in Australia on his Australian income.
> 
> ...


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## Bevdeforges (Nov 16, 2007)

Hi - actually, even if there isn't a tax treaty between the US and Australia, you won't be double taxed. You are entitled to the Overseas Earned Income Exclusion on all earned income while living outside the US. The form for this is 2555 and the instructions pretty much explain how it all works.

OK, if you only moved to Australia a few months ago, you may want to file for an extension until you hit your one-year anniversary in Oz because that's when your Overseas Earned Income Exclusion kicks in. (The alternative is to file as usual - though being overseas on April 15 means you have until June 15th to file - and then file an amended return to claim back any double taxation after you qualify for the exclusion. Filing the extension is an easier alternative.)

Go to the IRS website and find publication 54 (or order a copy from the IRS) for more than you ever wanted to know about filing from overseas. If you husband has a green card, he will also have to continue to file US taxes. In the year you left the US, you have the option to file jointly. After that you will probably want to consider filing separately, especially if he is now a "non-resident alien." 

The US Consulate sometimes sponsors VITA tax services (volunteer services that won't cost you) or can provide copies of pub 54. You shouldn't need to pay for tax filing assistance unless your financial affairs are fairly complex, but it's that first return after moving abroad that is the head-banger. Feel free to pose any questions here and we'll do our best.
Cheers,
Bev


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## canuckinqld (Jan 8, 2009)

Hi, just a quick comment...the others have given you more specific advice. 
I am a Canadian and believe me taxes are a nightmare!! I still own property in Canada so really got dinged in tax for 2007. My suggestion to you is find a tax professional in the US who is an expert on foreign earnings..not just someone who says that they are!! I learned that the hard way.
The complicated part about taxes is that Australia is on a July to June year and we in Canada and US are on a Jan to Dec year.
I now have an accountant in Canada to help me file. Here in Australia it was so simple and staightforward that I did it online. 
Good luck with that issue, and I hope you enjoy living here. I do!
Jo


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## interplanetjanet (Jan 7, 2009)

Thanks very much for all the replies! I'll definitely talk to a tax person here. You've convinced me.


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## interplanetjanet (Jan 7, 2009)

amaslam said:


> I really recommend you consult a tax professional. If your husband has ever been a Permanent Resident of the US then he must also file. In Australia I went with H&R Block for the first year as they did the tricky partial year calculations (i.e. 44/365 * deduction or 44/365 * income, etc.).


Can you please tell me which H&R Block you used? I just rang the location closest to me, and the woman I spoke it insisted that no H&R Block in Australia does US taxes.


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## canuckinqld (Jan 8, 2009)

*taxes*



interplanetjanet said:


> Can you please tell me which H&R Block you used? I just rang the location closest to me, and the woman I spoke it insisted that no H&R Block in Australia does US taxes.


Sorry if I was misleading. I used HR Block in Canada. That was last year, this year I have an accountant in Canada because the HR block advice cost me thousands. Good luck. Jo


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## interplanetjanet (Jan 7, 2009)

Oh no, that was amaslam I quoted! He said he used H&R Block in Australia.


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## amaslam (Sep 25, 2008)

Hi Janet:

I might have used US H&R Block because I did everything by e-mail and postal mail. I never walked into the local H&R as my stuff was fairly simple. I'm a bit surprised the lady at AU H&R didn't at least direct you the same way if they don't do US returns (why not, it would be an advantage for them). I did that one return (1st year) about 6 yrs ago so I'll see if the mailing address for my H&R agent was from the US. I do remember it cost me about $250 and not thousands. I went to the H&R website to do my taxes and my communication and contract was through there. The final paper return was mailed to me for signatures and then I could mail it to the IRS.

I apologise profusely if I misled anyone 



interplanetjanet said:


> Oh no, that was amaslam I quoted! He said he used H&R Block in Australia.


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## daniele456 (Dec 30, 2012)

*Capital Gains Tax*

I am a dual citizen of USA and Australia. I moved to Australia in 2004 and got caught up on filing my US tax returns in March this year (2012). 

Curious to know if anyone else knows which tax rate is applied by the US on capital gains that I make on shares in Australia? 

I know that capital gains are not classed as 'foreign earned income' therefore it will not be counted under the foreign earned income exclusion. 

Is the capital gains tax rate the same for Australian and US shares?


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