Help: First Time Attempting to File Without Using An Accountant

Hi everyone,

It's been a while since I've been on here! I have a question regarding my wife's US taxes. I apologise if this has already been talked about but each topic seems to contain a difficult subject matter, eg. pension earning, property sold etc.

Last year we used an accountant to do her taxes. This was because in the tax year she had been earning in the states so it was much simpler to pay somebody to do it.

However, this tax year she has been 100% earning in the UK and not in the states. We are hoping we can perform her taxes without paying minimum $350 for an accountant.

Firstly, is there a software where it doesn't ask for a spouse's SSN? I am a UK citizen so obviously don't have a SSN. TurboTax is my wife's preferred software prior to moving as it has the Spouse SSN stumbling block.

Also, does my wife need to claim for federal and state tax, or just federal?

She earns less than the $82,000 threshold, we have no kids, no property in the states or here in the UK. I believe it to be quite a simple situation when it comes to that side of things.

Any help would be appreciated. She obviously wouldn't have a W-2 this year either.

Thanks, Ben

If your spouse paid any State income taxes she may wish to claim a State income deduction on Schedule A. Aside from that, you will want to optimise to decide if electing to claim the foreign earned income exclusion produces the best result, make sure she files Forms 8965, FinCEN 114, 8938 and 8833 if required. If she has any investment in a UK pension plan, you will want to decide whether to elect into the treaty.

If your spouse paid any State income taxes she may wish to claim a State income deduction on Schedule A. Aside from that, you will want to optimise to decide if electing to claim the foreign earned income exclusion produces the best result, make sure she files Forms 8965, FinCEN 114, 8938 and 8833 if required. If she has any investment in a UK pension plan, you will want to decide whether to elect into the treaty.

Thanks guya.

She did not pay any state income tax so am I right in assuming she will not have to file for state tax with that being said?

What is the foreign earned income exclusion? How would we file exactly? I am very sorry for us having not a lot of knowledge in this.

She does have a UK company pension - which treaty is it that you are referencing?

IRS Publication 54 is worth reading to learn about the foreign earned income exclusion: https://www.irs.gov/pub/irs-pdf/p54.pdf

The US/UK tax treaty can be read here:
https://www.irs.gov/Businesses/International-Businesses/United-Kingdom-(UK)---Tax-Treaty-Documents

Thanks but this seems extremely complicated. Is it possible to submit tax without using an accountant or at least use TurboTax when living abroad?

The United States has the simplest system in the universe; worldwide on everything, forever.

The IRS has some excellent video content here:


There is a great deal more guidance on the IRS website:
https://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad

I use Tax Act.  Not as user friendly as Turbo Tax but allows lector if filing with a NRA spouse. 

She can use Turbo Tax and follow all the questions and see which forms it fills out.  She can then flip to Tax Act and complete those forms. 

You don't need to hire anyone.  Will probably take a couple of hours for her to do the first time.  Next year will be quicker.

Ben,
Your wife will need to find out if she is non-resident for tax purposes in the state where she last filed state taxes. If she's been in the UK for over a year its usually pretty straight forward to abandon US state tax filing requirements.....but some states are trickier than others.

Your wife can file US taxes by mail. File "married separately" and write NRA in the spouse SSN field and post the forms to the IRS. You might want to look into getting an ITIN so your spouse can claim you as an exemption.

Your wife can exclude $100,800 of foreign earned income from US taxes if she meets the criteria, or she can use a form 1116 to clam a credit for UK tax paid.

She can also claim US tax deferral on contributions and gains for a UK employer pension plan under Article 18 of the US/UK tax treaty......

Thanks guys.

We don't own a property and her current pension plan doesn't currently exceed the $100,800.

How does my wife find out if she is a non-resident and how does she abandon state tax? She last filed in the state of New York. Her US bank accounts and driving license are linked to Pennsylvania however.

We feel that we're the only ones confused by this haha. It's all very complicated.

Thanks guys.

We don't own a property and her current pension plan doesn't currently exceed the $100,800.

How does my wife find out if she is a non-resident and how does she abandon state tax? She last filed in the state of New York. Her US bank accounts and driving license are linked to Pennsylvania however.

We feel that we're the only ones confused by this haha. It's all very complicated.

NY is one of the more straightforward states. Just file a return as a part year resident for the year you move abroad, then no need to file for the following year.

No idea about PA. Check their website or call the state tax department.