Where do we start?

Hello

My American partner has been living in the UK for the past few years but has yet to file a tax return since living in the UK but we want to get up to speed.

She is earning around £30k per year and has no other assets or business interests etc.

She also has just inherited a fairly large sum of money which she wants to use to pay off her student loan (and then put in to a UK savings account what's left).

Can anyone please give us some advice as we are both financial novices. Is she likely to owe any back taxes? What's the best way she can get up to speed?

Is there anything else we need to be aware of / be careful of in regards to the inheritance ?

Appreciate all the help this forum offers!

Thanks

R

most folks would use the IRS Streamlined Foreign Offshore Procedures (SFOP) to catch up. https://www.irs.gov/individuals/international-taxpayers/u-s-taxpayers-residing-outside-the-united-states

Commenting so i dont lose this thread as want to revisit it.

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Do the returns and see if she actually owes any tax - unlikely I would say. If she doesn't just file the returns - there should be no penalties or interest. Is she FATCA compliant?

Others who have much more knowledge than I might suggest using the streamlined procedure - if you're considering that ask them why if no tax is due?

A

I'm looking into something very similar for my wife. Only she has graduated and needs to start paying student loans back, which is another headache in itself.

Looking at this: https://www.irs.gov/pub/irs-pdf/p54.pdf

It states if you are earning over $12,000 then you must file taxes. Am I correct in understanding that?

I can't attach a screenshot for some reason

I'm looking into something very similar for my wife. Only she has graduated and needs to start paying student loans back, which is another headache in itself.

Looking at this: https://www.irs.gov/pub/irs-pdf/p54.pdf

It states if you are earning over $12,000 then you must file taxes. Am I correct in understanding that?

I can't attach a screenshot for some reason

That looks correct to me.

Your income, filing status, and age generally
determine whether you must file an income tax
return. Generally, you must file a return for 2018
if your gross income from worldwide sources is
at least the amount shown for your filing status
in the following table.
Filing Status* Amount
Single .........................  $12,000
65 or older ................... $13,600
Head of household ............... $18,000
65 or older ................... $19,600
Qualifying widow(er) ............. $24,000
65 or older ................... $25,300
Married filing jointly .............. $24,000
Not living with spouse at end of
year ........................ $ 0
One spouse 65 or older ......... $25,300
Both spouses 65 or older ....... $26,600
Married filing separately ........... $12,000
* If you are the dependent of another taxpayer, see
the Instructions for Form 1040 for more information
on whether you must file a return.
Gross income. This includes all income you
receive in the form of money, goods, property,
and services that is not exempt from tax.
For purposes of determining whether you
must file a return, gross income includes any income that you can exclude as foreign earned
income or as a foreign housing amount.
If you are self-employed, your gross income
includes the amount on Part I, line 7, of Schedule C (Form 1040) or line 1 of Schedule C-EZ
(Form 1040).

Looking at this: https://www.irs.gov/pub/irs-pdf/p54.pdf

It states if you are earning over $12,000 then you must file taxes. Am I correct in understanding that?

The IRS has finally corrected the above error in publication 54. It now agrees with all other published information on IRS sites and in publications stating the threshold for filing for MFS is $5.

https://www.irs.gov/forms-pubs/correction-of-errors-on-page-3-of-the-2018-publication-54

"In the row "Married filing separately," the amount should be "$5" instead of "$12,000."

Hat tip to Moulard.