Uk citizens in US - first year US return

Hi,

Trying to sort out our returns, and need a bit of reassurance that our thought process is right....

Husband and I are both UK citizens, lived and worked in UK until Feb 2003 for UK companies not connected to the UK. Moved to US in March 2003 where H works for a hospital and I became a homemaker.

As we were both present in the US for more than 183 days in 2003, I understand that we are resident aliens from Mar 2003 and nonresident aliens prior to that, therefore requiring us to file a dual status return. As we both worked for UK companies prior to March, I understand that we do not need to report our UK earnings on 1040NR (the form will then be blank?) - is this right?

I also have read on the IRS website that we can joinly elect to be treated as resident aliens for the full year - I think that this will be better as we can take advantage of the MFJ rates instead of being forced to file as MFS. If we file as full year residents, I gather that we have to report our earnings for the full year, so therefore need to include our UK earnings too. Can we use form 1116 to claim foreign tax credits for UK tax paid? As we paid UK tax at a higher rate than in the US, is filing our returns as full year residents better than filing a dual status return?

Hoping that this is OK as I don't think I can face filing the 1040NR - have read and reread the instructions but am not any more enlightened....

Thanks so much
Tigs

Hi tigs

You have interpreted the instructions absolutely correctly. I cannot however tell you whether it will be better to file 2 dual status return (you cannot file these jointly) or one MFj full year resident return a I do have your tax information. But I can say that more often than not it is better to make the election to file jointly and use the MFJ tax rates, standard deductions, etc....

Helen

Thank you so much Helen!