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Topic: Owed taxes when earning less than 70k a year  (Read 2632 times)

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Owed taxes when earning less than 70k a year
« on: April 25, 2023, 06:13:09 PM »
I dread tax season every year
 
So I just got a letter from the IRS saying they didn’t allow my foreign earned income exclusion because it was either incomplete or not attached.  So they changed my tax accordingly on form 1040.

I’m going to pay it because I don’t want the hassle of dealing with the IRS, but since I’m going to have to file again I just want to make sure I’m doing this correctly.

On form 2555: I file separately from my husband, I don’t make 70k+, don’t own a house, and qualify for the physical presence test, how should I be filing out that form?


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Re: Owed taxes when earning less than 70k a year
« Reply #1 on: April 25, 2023, 06:25:31 PM »
It would be good to know exactly why the 2555 was rejected & also so you can resolve for 2023 going forward. Unless you share a redacted 2555 or seek professional advice it’s impossible to know. You can earn over $100k so no problems with your less then 70k wage. Depending on how much you had to pay, look at an amendment or a least a 1116 so you don’t get stung twice.


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Re: Owed taxes when earning less than 70k a year
« Reply #2 on: April 25, 2023, 06:33:01 PM »
I honestly don’t know, my best guess is it was incomplete. It was my first time doing it fully myself since the person who used to do my taxes passed away.


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Re: Owed taxes when earning less than 70k a year
« Reply #3 on: April 25, 2023, 07:54:35 PM »
I honestly don’t know, my best guess is it was incomplete. It was my first time doing it fully myself since the person who used to do my taxes passed away.

I would compare the one that worked with the one that failed and note the differences.
Dual USC/UKC living in the UK since May 2016


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Re: Owed taxes when earning less than 70k a year
« Reply #4 on: April 25, 2023, 09:28:58 PM »
I did. That’s why I’m confused about owing taxes.
That’s why im trying to figure out how to do it to see if I missed anything or messed up something.

I honestly don’t know how it went wrong.


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Re: Owed taxes when earning less than 70k a year
« Reply #5 on: April 25, 2023, 10:13:58 PM »
Without seeing the return I guess folks here won’t be able to help. Did the amount reported on the 2555 form match the amount shown on line 8d of Schedule 1 and line 1h of the 1040?  (Just looking at my son’s return which also uses the FEIE to zero out his UK wages. He uses TurboTax)
« Last Edit: April 25, 2023, 10:16:43 PM by durhamlad »
Dual USC/UKC living in the UK since May 2016


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Re: Owed taxes when earning less than 70k a year
« Reply #6 on: June 08, 2023, 07:13:35 PM »
TurboTax does expat tax?
I’ve tried using them before but it seems like they don’t.

I was going to print the forms out and mail it to the IRS, or I was told you can file on IRS website.


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Re: Owed taxes when earning less than 70k a year
« Reply #7 on: June 08, 2023, 07:30:22 PM »
TurboTax does expat tax?
I’ve tried using them before but it seems like they don’t.

I was going to print the forms out and mail it to the IRS, or I was told you can file on IRS website.

As an expat I and my son have e-filed with TurboTax for the past 5 years. It accepts an overseas address, foreign tax credits, and foreign earned income exclusion. It doesn’t know about tax treaties, that is for you to know, for example that SS and OAP is not taxed at all if you are living in the UK.
Dual USC/UKC living in the UK since May 2016


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Re: Owed taxes when earning less than 70k a year
« Reply #8 on: June 10, 2023, 05:29:43 PM »
I’ve tried to do my taxes on turbo tax and it seems like it’s always just for a standard W-2.

Also it seems like I can’t do married filed separately..?


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Re: Owed taxes when earning less than 70k a year
« Reply #9 on: June 10, 2023, 07:13:02 PM »
I’ve tried to do my taxes on turbo tax and it seems like it’s always just for a standard W-2.

Also it seems like I can’t do married filed separately..?

Shame about that. It works for my son and daughter filing singly and for us filing MFJ. I have no experience using if for MFS.

In my son’s case it puts his UK wages on line 1g and completely negates it on line 8. My wife and I have UK income including pensions and it manages them as well.
Dual USC/UKC living in the UK since May 2016


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Re: Owed taxes when earning less than 70k a year
« Reply #10 on: June 11, 2023, 01:02:10 PM »
I’ve decided to use expat file.

Just making sure when calculation how much I’ve earned I put the total of after taxes, right?


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Re: Owed taxes when earning less than 70k a year
« Reply #11 on: June 11, 2023, 04:09:11 PM »
I’ve decided to use expat file.

Just making sure when calculation how much I’ve earned I put the total of after taxes, right?

If you are referring the total you report as foreign earned income exclusion. It should be the gross, before taxes.
Dual USC/UKC living in the UK since May 2016


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Re: Owed taxes when earning less than 70k a year
« Reply #12 on: June 11, 2023, 05:14:19 PM »
Shame about that. It works for my son and daughter filing singly and for us filing MFJ. I have no experience using if for MFS.

In my son’s case it puts his UK wages on line 1g and completely negates it on line 8. My wife and I have UK income including pensions and it manages them as well.

For MFS, you need a SSN for the “other” spouse and Turbo Tax doesn’t recognise a NRA spouse. Tax Act does which is why we usually recommend it.  They improved their user friendliness massively and are virtually identical to TT now but all MFS with a NRA spouse.


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Re: Owed taxes when earning less than 70k a year
« Reply #13 on: June 12, 2023, 01:09:50 PM »
Thank you guys for all your help.
I finally filed my taxes, thank god it’s over with.
I ended up using Expat file  ;D


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