Cheap tax software?

Hey everyone, I'm new to this site but it seems like a great place. Does anyone have any recommendations for a good, cheap e-filing tax website for US citizens living in UK? From my research, suitable tax software needs to have the option for foreign filing, and the following forms are needs to file:

- Federal Tax Return
- Form 1040
- Form 2555
- Form 1116 (optional?)

It's incredibly difficult to find out from searches if tax software caters to foreign filing, and what the cost is. I just got 90% through my 'free' TurboTax federal return when I was told that I had to in fact upgrade to the $55 deluxe edition because of needing to use the form 1040. Ridiculous.

I've earned well under the foreign earnings limit for 2015, have been in UK for all of 2015 and don't have any US-living circumstances like US property, so I won't owe any US tax. So, I refuse to pay $55. I actually wouldn't mind paying up to $20-$30, because I'd have to pay to mail the paper forms anyway, and hey - the site has developed the software so why not charge a bit.

If anyone has any recommendations I'd really appreciate it.

Cheers!
Lee

The IRS provide all of the forms for free on their website, together with free instructions.

It is not possible to tell from the words in your question if you have identified all of the US government forms that might be required in your circumstances

Thanks for your reply. Do you mean that the IRS provide all the printable forms on the website? If so, I understand that, I'm wanting to e-file though.

If you're meaning e-filing, could you please expand on what you're saying? All I can find on the IRS.gov site is links to tax websites. Is there an ability to e-file directly on the IRS.gov site?

To answer your question, I think I need to file the 1040 form and the 2555 form.

Thanks.

Most Americans overseas file income tax returns on paper; Form 1040 and 2555 alone are fewer than required by most US persons living outside the United States.  I'd suggest reading IRS Publication 54 thoroughly over the next couple of months before filing any forms.

Yes,  read publication 54. Here is a list of the forms that cover the needs of most expats and which you may wish to learn more about. TaxAct has all these forms and can help you compete them. It is less expensive than TurboTax. At $29.99 it is within your proposed budget. Mailing them in by post is no great inconvenience.

1040 (this is the top page of your tax return and your main return)

Schedule B (bank interest and dividends,  and to declare if you have signatory authority over foreign accounts);

8965 (health care exemption, exemption type C);

2555 (exclusion of foreign earned income up to $100,800), and/or

1116 "passive", "general" & "resourced by treaty" versions (to claim foreign tax credits for foreign tax you have paid);

8938 (report of foreign accounts, if you have >$200,000 in such);

8833 (to claim a treaty position on a foreign pension plan);

Schedule A (itemized deductions, such as mortgage interest, though it may be simplest just to ignore this and take the standard $6,300 deduction);

8621 (foreign mutual funds subject to 1291 fund PFIC tax);
Schedule C (own business);
Schedule D (capital gains);
Schedule E (other income, such as rental property income, book/music royalties)

Convert your foreign country wages to dollars using the exchange rates here: https://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates

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Thanks for both of your replies, and especially RW for your extensive reply - that's a huge help. I think from your list, I'll need to file forms 1040, 8965 and 2555. Am I correct in assuming that if the circumstances of those other forms that you mentioned don't apply, I don't have to complete them?

If I've lived & earned money only in UK for 2015, is that declared both on 1040 and 2555, or just 2555? The reason I ask is because on one of the tax sites that I tried, it said that if 1040 shows no income, then you can't e-file.

I guess, if it is possible to e-file, I've just got to weigh up the ease & cost of paper filing vs e-filing. It'd cost ~$12-15 I'd guest to mail it, so $30 or under to e-file wouldn't be a big deal if it was way easier. Do most Americans abroad file by paper because it's both easier & cheaper? Or just cheaper? I heard that it's only in 2011 that e-filing became an option for Americans living abroad, and just wondered if the reason that it's not a 'done thing' is because it's relatively new, so people are simply used to doing it by paper.

Thanks for everyone's help, I appreciate it.

There is an example of a US tax return here, for someone called Betsy Ross, with very simple income to report. This will show you how the 1040 and 2555 are completed.

https://www.dropbox.com/s/feg0aktdi6qo2b8/BETSY%20ROSS%202015%20Tax%20Return.pdf?dl=0

I guess, if it is possible to e-file, I've just got to weigh up the ease & cost of paper filing vs e-filing. It'd cost ~$12-15 I'd guest to mail it, so $30 or under to e-file wouldn't be a big deal if it was way easier. Do most Americans abroad file by paper because it's both easier & cheaper? Or just cheaper? I heard that it's only in 2011 that e-filing became an option for Americans living abroad, and just wondered if the reason that it's not a 'done thing' is because it's relatively new, so people are simply used to doing it by paper.

I'm not sure where Guya got that most expats fill out paper forms. Maybe amongst senior citizens who have lived aboard for decades. Personally I've been e-filing abroad using TaxAct since 2009.

While there can be difficulties using software for the first time, particularly when you know a figure should be in a field but you can't get the software to put it there, quite  frankly I think it is bad advice to advise someone to start with the paper forms when they are filling with foreign income for the first time. Computers exist for a reason...

TaxAct has changed this year so you can no longer file 1040s for free like you could in the past. Only 1040a and 1040ez are free now. I haven't used HR Block, but I know the free version includes 1040, 1116, 2555 and 8965.

If you have used either one of those in past, I'd go with whichever one you are familiar with, as that should be faster/easier. If you used TurboTax, I would try TaxAct first. I found that identifying which screen you add foreign wages on was easier in TaxAct. You don't pay until the end so you can switch if you aren't happy. I would also just e-file rather than mailing the completed forms.

I'm not sure where Guya got that most expats fill out paper forms. Maybe amongst senior citizens who have lived aboard for decades. Personally I've been e-filing abroad using TaxAct since 2009.

While there can be difficulties using software for the first time, particularly when you know a figure should be in a field but you can't get the software to put it there, quite  frankly I think it is bad advice to advise someone to start with the paper forms when they are filling with foreign income for the first time. Computers exist for a reason...

TaxAct has changed this year so you can no longer file 1040s for free like you could in the past. Only 1040a and 1040ez are free now. I haven't used HR Block, but I know the free version includes 1040, 1116, 2555 and 8965.

If you have used either one of those in past, I'd go with whichever one you are familiar with, as that should be faster/easier. If you used TurboTax, I would try TaxAct first. I found that identifying which screen you add foreign wages on was easier in TaxAct. You don't pay until the end so you can switch if you aren't happy. I would also just e-file rather than mailing the completed forms.

+1 for TaxAct. I've used TurboTax and H&R Block in the past and both of them get some of the 1116 calculations wrong, which TaxAct does not. It's also substantially cheaper since TurboTax started requiring some sort of premium edition for anyone with investment income.