Living in UK/ USA Taxes

Hello, I am new on this board and this tax topic has got my attention and made me a little worried. I am an American citizen married to a UK citizen. We moved back to the UK in 2004. She had just received her "green card" when we decided to move back to the UK. Anyway, my basic question is, Do I have to file/pay taxes in the USA? I plan on living in the UK for a long time, maybe forever. My name is on the mortgage, I have an ISA and started a UK pension. Basically, My life is in the UK now. I know similar questions have been asked and answered but im starting to get panicked about it. Thanks in Advance. 

Yes - US citizens must file annual tax returns. Your green card holder wife must also file annual US returns since she has a green card.  In practice you'd probably file a joint return.

However, this does NOT mean you necessarily owe any tax since in general terms UK rates are higher than US rates.

So if you haven't file since, say, 2004 you should catch up now.

Thank You for the information. My wife is handing back her green card so that should relieve her of any US tax issues. I guess i'll have to get in touch with the IRS. I earn less than the taxable amount so I should be fine. I am concerned with my assets, such as when we sell our home down the line. Capital Gains and such. Anyway, thank you again.

Gettting rid of the green card (eg by filing an I-407) is probably tax neutral in her case as she not is a long-term permanent resident, so this sounds a sensible move.

I have a question...... surely if one remains outside of the US for a certain period, they lose their greencard anyway without having to file the I-407? Or would their be legal implications of not filing it should that person want to return to the states in the future and obtain a new residency?? 

There are immigration issues which I am afraid I can't comment on.

From a tax perspective any individual who has not gone through the formal process is still regarded a permanent resident and taxable on worldwide income.

OK, thanks  ;DI guess it would just be best to file then..... *sigh* just one more form to complete!!

Laura X Marie,

No.  That's not what Guya said.  He said there are legal issues he can't comment on.  You need to discuss with an emmigration lawyer to determine what *effective* date you gave up your greencard.  The effective date may be earlier or later than what you believe to be the case.  Guya and I are not lawyers, and can not comment on what constitutes the "effective" date.  What forms are required are entirely dependant on the date - different forms on different dates.  Once we know the effective date, we can then tell you whether or not you have to continue to file, and if so, what forms are required in order to cease this filing obligation.