Totally messed up my 1040 - can I fix it?

I am married and have been living in the UK for 7 years with my UKC husband - and have been faithfully filing my 1040 and 2555 each year as well.

However, this year I think I totally messed up. I sent in my 2010 taxes to Austin in February, and I only just learned about FBAR and my requirements for Schedule B!

I didn't complete a Schedule B and I definitely should have as we sold our flat in 2010 and have more than $10k still sitting in savings we are going to use to emigrate back to the US.

A couple of questions if anyone has any advice:
a) Do I definitely need to complete Schedule B?
b) Can I send in a new form 1040/2555 - this time with Schedule B completed? i.e. 1040x? Or can I just send in 1040 separately with a covering letter?
c) Is sending a new 1040 necessary, or can I just complete FBAR as I know it goes to a different IRS centre?
d) Do you get taxed on the balances you hold in foreign bank accounts declared in the FBAR?
e) Should I back file my 1040 and/or FBAR for 2009 and 2008?

What a nightmare...part of me is relieved to be moving back to the States and only having to pay taxes once!

You can amend a return, I had to do this last year when I realized after filing that I'd left off an itemized deduction. I filed an amended return (there's a form for it on the IRS website - it's basically a 1040 that you fill out again, but it's marked specially as being an amended return rather than a new one) and got my extra bit of refund about 2 months later, as I recall.

Don't know about any of the other things, though, sorry.

You only potentially get taxed on interest earned, not on the balance. You should file the FBAR for this year no matter what, but I think you will need to declare any interest that was earned so the amended return would be required.

Great, thanks all. I assume I can send in a historic FBAR for 2009 and 2008 if necessary? Did it only come into existence in 2008?

I just calculated I earned whopping $57 worth of interest in 2010 - almost worth all of this hassle re-filing my 1040 and filing an FBAR 

Definitely file an amended return for 2010 if your original return was missing anything at all (even if it's just a small change, I'd do it for the peace of mind).

You'll need forms 1040X, 1040, and Schedule B. Also check if your changes affect any of the other forms you initially filed, and include them only if they have changed. For instance, your Schedule B isn't likely to change anything on your 2555. If that's the case don't re-file the 2555.

No need for a covering letter - Form 1040X includes a space for you to explain the changes you are making.

No tax is levied on the balance of accounts declared on the FBAR. The government just wants to know the balance so they can fight money laundering and the like. Of course you should have been paying tax on any interest you are earning in the UK; if not, pay that tax on your amended return.

If you have not filed FBARs for previous years, file them now and attach a cover letter saying you were unaware of the requirement to file. The IRS says: "If you learn you were required to file FBARs for earlier years, you should file the delinquent FBAR reports and attach a statement explaining why the reports are filed late. No penalty will be asserted if the IRS determines that the late filings were due to reasonable cause. Keep copies of what you send for your records." (from http://www.irs.gov/businesses/small/article/0,,id=210244,00.html#FR16)

If you should have sent Schedule B for previous years but didn't, I'd suggest you amend those returns as well (meaning send 1040X, 1040, Schedule B, and anything else that changed).

Many thanks politicfool - I assume it is okay to get these postdated FBARs in by 30th June?

And is there any deadline for 1040x? April 15?

You are very unlikely to owe any tax on that amount of interest, but since you have to file an FBAR, you will just need to file the Schedule B because it's a foreign account. You actually have until sometime in June to file since you live outside the US.

File the FBARs for previous years as soon as you possibly can, since they are already late. You should be able to say truthfully that you filed them promptly upon learning of the requirement. However, I suppose you could include them in the same packet with your 2010 FBAR which you'll be sending no later than 30th June.

The deadline for filing an amended return (i.e. Form 1040x) is three years after the due date of the original return. However, if your amendment results in you owing the IRS money, you may be charged interest on the amount you owe, starting from the due date of the original return. (In this case, I agree with DrSuperL99 that you are unlikely to owe anything, but I just mention it so you are aware.)

Right, got it. Thanks for all the help everyone.

This is all so unbelievably disappointing. I wish that the Embassy IRS site made a bit more of a mention of FBAR - I feel like they make a big deal about filing your 1040 and 2555 and there is NO mention of this. Just more angry at myself for missing it all these years I guess.

Now re-doing 7 years worth of returns in the midst of emigrating over the next two weeks - total nightmare!

Also, if anyone happens to have the Treasury Reporting Rates of Exchange as of December 31 from 2009 back to say 2004, that would be amazing!

Have checked http://www.fms.treas.gov/intn.html [nofollow] but only the 2010 rate is listed - you have to email them for the historical rates and god only knows how long it will take for them to come back to me!

Also, if anyone happens to have the Treasury Reporting Rates of Exchange as of December 31 from 2009 back to say 2004, that would be amazing!

Have checked http://www.fms.treas.gov/intn.html but only the 2010 rate is listed - you have to email them for the historical rates and god only knows how long it will take for them to come back to me!

The IRS says: "Though the FBAR instructions direct filers to use the official exchange rate, the Internal Revenue Service has no official exchange rate and generally accepts any posted exchange rate that is used consistently. For exchange rates, check the U.S. Treasury Web site or other commercial sites." (from http://www.irs.gov/businesses/small/article/0,,id=210249,00.html)

You'd be better off using a generally available exchange rate to do your FBAR, rather than waiting for the Treasury to respond to your email. Try http://www.oanda.com/currency/historical-rates. Note that according to the instructions you should use the exchange rate from December 31st of the year in question - not the average exchange rate for the whole year.

Just wanted to say I'm in the same boat Isla, just realised I need to do the FBARs and have very little interest, only just made the requirement in 2009 to declare because of a car loan received.  Off to deal with my paperwork headache!

I agree about the Embassy website, I too checked there and have been filing the 1040 & 2555 since I've moved over here in 2005, but just realised in the last couple of weeks about the FBAR.  Luckily I think I only have missed on year!  and interest earned is probably about the same as yours, have not calculated that yet... thank goodness we have been renting all these years and have not bought a house!!