Confused about Extensions

Hi,

My wife and I are both US Citizens while my wife is a UK citizen as well. We both lived and worked in the US up until last July and moves to the UK in August. I have been working in a UK company since the move but my wife is at home with kids. We still have two homes in the US that are on rent.

I understand that we need to file our US taxes and take foreign income exclusions. I also understand that since I have not been in the UK for 330 days, I need to wait until that time to file my taxes but file for extension now.

I am told that living abroad gives you automatic extension of two months. If you file for regular extension you can get six months instead of two months. Having six months should cover my 330 day period.

My questions are:

1. Do I file for a two month extension or regular 6 month extension?
2. If I file for 2 month extension, do I file for another 4 monmth extension later?
3. I plan on using Turbo Tax for completing my taxes. Is this a bad idea considering my situation?

Thank you very much for any help.

You do not file for the 2 month - it is automatic. You file a 4868.

I have never used Turbotax.  Does it cope with treaty resourcing well on US income after you moved to the UK (assuming your wife is a UK domiciliary and/or you will not claim the remittance basis in the UK)?

Guya, Thank you for your reply.

When do I file 4868? Now or later? Also, after the two month period, I will be out of 330 days restriction. Do I file for extention at that time?

I am totally lost at the 2nd part of your answer. First off, I have never used Turbo tax for anything other than just US Fed taxes. It is my first time with dual tax issuel. Second, I have no idea what you mean by "UK domiciliary". If you are asking for our UK status; My wife is a UK citizen by Birth/decent and I came here on a spousal visa, (I think it is called Unlimited leave to remain); valid for 10 years.

Thank you.

It is not clear from your answer but I assume that your wife is domiciled within the UK because she has a domicile of origin here, but you do not.

Therefore she reports worldwide income and gains on her UK returns - but you could elect not to if you claim the remittance basis for UK tax.

Because both the UK and US would be taxiung her on worldwide income to avoid double taxation she might choose under the tax treaty to resoource some of her US income as foreign on a treaty-resourced Form 1116 on her US return.  If you are claiming the remittance basis in the UK for the first 7 tax years of UK residence this option would not be open to you.

I have never used Turbo tax and do not know how well it copes with what is truthfully a very complex scenario.

While I am here, I moved to UK on July 14 last year. With the automatic 2 month extension, I will have to have my tax forms postmarked by July 15, so I guess that makes me pretty close to the 330 day mark, though I'm not exactly sure how many days that is. Do you think I should file for the extra 6 month extension or just wait until the last minute to send my forms in? 

With the automatic 2 month extension, I will have to have my tax forms postmarked by July 15,

The 2 month extension takes you to June 15 not July.

The 2 month extension takes you to June 15 not July.

Oops, I meant June 15. Do you think that is cutting it too close to the 330 day thing?

It would be if you vosit the US again before June 15th.  Separately don't forget the TD F 90-22.1 has to be received by June 30th, not filed by that date.

Thank you again Guya. More and more, I am thinking I should not do my own taxes this year. I have no idea about what exactly domiciled means. Also, this is the first time I am hearing of something relativng to 7 years. I was under the impression that for as long as I am here in the UK, I will file my US taxes and take foreign income exclusion.

Would you be able to recommend a decent but a bit inexpensive tax guy in the London area who knows both UK and US taxes?

Thanks.

It is not clear from your answer but I assume that your wife is domiciled within the UK because she has a domicile of origin here, but you do not.

Therefore she reports worldwide income and gains on her UK returns - but you could elect not to if you claim the remittance basis for UK tax.

Because both the UK and US would be taxiung her on worldwide income to avoid double taxation she might choose under the tax treaty to resoource some of her US income as foreign on a treaty-resourced Form 1116 on her US return.  If you are claiming the remittance basis in the UK for the first 7 tax years of UK residence this option would not be open to you.

I have never used Turbo tax and do not know how well it copes with what is truthfully a very complex scenario.

It would be if you vosit the US again before June 15th.  Separately don't forget the TD F 90-22.1 has to be received by June 30th, not filed by that date.

Sheesh... do I just put that in with my other tax documents, or does that go separately somewhere else? I'm not planning on leaving the UK at all before filing in June. I am thinking I could just take my stuff to the post office on the 14th or 15th of June and get it all in at the same time, which should just make the 330 day mark since I arrived here on 14th July. I have a W-2 from my former US employer, a tax statement for tuition contribution thingy from my former university, and all of my pay stubs from my employer here in the UK. What else do I need, besides the regular 1040, the foreign income form (forgot the name of it), and the TD F 90-22? Also, my DH and I share the bank account, though even together we don't earn over £80,000, so do I include him on my return since we share finances, or not?

Urgh, I hated doing my taxes in the US. Even though they were easy, I always had an accountant friend do them. Now I am really lost!!!