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Topic: Complete Tax Confusion  (Read 1441 times)

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Complete Tax Confusion
« on: February 13, 2015, 10:29:38 PM »
So, I want to get my taxes filed ASAP so I can finish my student aid for next year and I'm complete confused. I've used TurboTax since 2006 to self e-file and it's always been fine but here's what I'm looking at:

Worked a full time and part-time job from January - August 2014, moved to the UK August 30th, health-care coverage ended on August 29th. US citizen SSM to a UK spouse. I got a part-time job mid-November and was given a tax paper by my UK employer. 1/2 of my federal student loan was disbursed in November, directly to my university (no money left over, so nothing came to me).

Forms: W2 for the full time job, W2 for the part-time job, employee/pay form from the UK job

Do I need any forms that show the federal student loan went right to the university, and not to me? Do I need any forms from the government about the student loan? I'm really worried I'm going to screw something up and end up in trouble...I'm in the far northwest corner of Northern Ireland, so doubtful on finding an accountant to do US taxes, especially not a cheap one. :/


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Re: Complete Tax Confusion
« Reply #1 on: February 14, 2015, 08:10:13 AM »
If it's a loan, it's not income. Don't worry about it. Your only real issue might be the lack of health care coverage for the latter part of the year. If you absolutely need to file now, before you meet the physical presence test (330 days) or the bonafide resident test, it's probably going to be cheaper to pay the penalty (whatever it is) than pay a qualified accountant to do an otherwise simple tax return.

You do need to report your gross UK earnings on your US return, after converting to US$. If any tax was deducted from your earnings in November-December, you can take a tax credit. Also, you can probably still use TurboTax, and just input your current details.
Married December 1992 (my 'old flame' whom I first met in the mid-70s)
1st move to UK - 1993 (Letter of Consent granted at British Embassy in Washington DC)
ILR - 1994 (1 year later - no fee way back then!)
Back to US in 2000
Returned to UK July 2011 (Spousal Visa/KOL endorsement)
ILR - September 2011
Application for naturalization submitted July 2014
Approval received 15-10-14; ceremony scheduled for 10 November!
Passport arrived 25 November 2014. Finally done!


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Re: Complete Tax Confusion
« Reply #2 on: February 14, 2015, 09:27:27 AM »
You could file now, pay the healthcare penalty on Form 8965; not elect the foreign earned income exclusion on Form 2555; but amend later in 2015 once you have met the physical presence test and claim a refund from the IRS at that stage.


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Re: Complete Tax Confusion
« Reply #3 on: February 14, 2015, 11:34:06 PM »
But I've been covered by the NHS as a full-time student since September...so I *DO* have health coverage just not through my employer. I really don't want to pay a penalty or get in trouble with the IRS...I'm worried that could cause problems with my student loan. :(


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Re: Complete Tax Confusion
« Reply #4 on: February 15, 2015, 01:41:02 AM »
I don't see why the OP should need to pay any healthcare penalty. He/she had health insurance for the entire year.


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Re: Complete Tax Confusion
« Reply #5 on: February 16, 2015, 12:29:08 PM »
The accountant (an expat service based in MI) said they can't file for me until August because of the healthcare thing but the deadline for federal student aid is in May! If I can't get financial aid I can't afford next year's tuition and I'll lose my visa and have to go home and God only knows when I'll get to see my wife again!

My whole future is suddenly crumbling because of the greedy goddamn IRS. :(


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Re: Complete Tax Confusion
« Reply #6 on: February 16, 2015, 02:01:52 PM »
The accountant (an expat service based in MI) said they can't file for me until August because of the healthcare thing but the deadline for federal student aid is in May!

Does the accountant in MI understand the problem with your federal student aid in May?

There is no reason why the accountant cannot file now. The healthcare situation may likely result in a penalty (based on your AGI or MAGI, and then for only 4 months). The accountant may be trying to avoid this, but doesn't understand the consequences for the student aid. Make sure they understand. As was explained in an earlier post, pay it now (file 8965 to find the amount of the penalty), but once you qualify for the 911 exclusion (as on form 2555) in July or August 2015, file a 1040X and reclaim the penalty paid at this time.

If you go through the accountant in MI, the cost of filing the 1040X may be more than the original penalty, therefore, it may be just a question taking the hit and living with it. Depending on your earnings, the amount of the penalty may not be that great for the 4 months involved. The "not be that great" is always subjective to the individual.


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Re: Complete Tax Confusion
« Reply #7 on: February 16, 2015, 06:34:33 PM »
Yet another reason for NOT using a "professional". IMHO, they all too often do what's easiest for them, not what's best for you.

No reason whatsoever to need a professional in your situation; the filing should be fairly straightforward. Input your info into TurboTax and see what the figures are; you can always file an amended return at a later date.
Married December 1992 (my 'old flame' whom I first met in the mid-70s)
1st move to UK - 1993 (Letter of Consent granted at British Embassy in Washington DC)
ILR - 1994 (1 year later - no fee way back then!)
Back to US in 2000
Returned to UK July 2011 (Spousal Visa/KOL endorsement)
ILR - September 2011
Application for naturalization submitted July 2014
Approval received 15-10-14; ceremony scheduled for 10 November!
Passport arrived 25 November 2014. Finally done!


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Re: Complete Tax Confusion
« Reply #8 on: February 17, 2015, 02:52:56 PM »
Quote
Yet another reason for NOT using a "professional". IMHO, they all too often do what's easiest for them, not what's best for you.

No reason whatsoever to need a professional in your situation; the filing should be fairly straightforward. Input your info into TurboTax and see what the figures are; you can always file an amended return at a later date.

That's probably what I'm going to do...this is getting too expensive too quickly. I talked to the International person at my university and she gave me the contact info of someone in the US Loans Dept. that might have more information.


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Re: Complete Tax Confusion
« Reply #9 on: February 17, 2015, 06:54:28 PM »
I'd file now and pay the penalty and amend later if needed.  Fire the "accountant" though as he or she does not understand the rules!


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