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Topic: Half Year in US, Half Year in UK Tax question..  (Read 1377 times)

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Half Year in US, Half Year in UK Tax question..
« on: February 17, 2009, 01:06:20 PM »
I am confused about my income taxes.  My wife and I moved from the US (Tennessee , no state income tax) in June of 2008,  and have worked in the UK since July of 2008.  We have all of our W2’s from the US, but I have read that I have to claim my earnings here in the UK as well.  Since I won’t receive a W2 how am I supposed to do that?  My mother in law tells me that we will get back in April a record of what we made the previous year.. but won’t that be April to March where the US tax year is Jan-Dec? How do I find out how much I have earned/paid from June 30th 2008 – Dec 31st 2008 in the UK?  I don’t qualify for a 2555 because I have not been here long enough, so I have to file a 1116 this year right?  Is there anything else I have to do?  I have read through a lot of posts and haven’t really seen this asked so I am confused.

Is it possible for me to go ahead and file (I maintain an American address) and then just amend afterwards as I have read you can amend up to 3 years after the fact.  I only make £8 an hour and my wife only a bit more, so we aren’t making a lot of money and I’ve read if you make under $80k, then generally the taxes are excluded, but since I won’t be using a 2555, it is more that my tax here will balance out what I might owe there.  Right now we are set to get a decent refund, and could honestly really use the money, are we stuck till April? 

I know that’s a lot of questions but this is completely new to us.


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Re: Half Year in US, Half Year in UK Tax question..
« Reply #1 on: March 02, 2009, 08:58:35 PM »
this will be my situation a year from now...not sure what the answer is but also curious to know!


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Re: Half Year in US, Half Year in UK Tax question..
« Reply #2 on: March 05, 2009, 02:00:50 PM »
I just kept a personal record of my UK income (as the tax years are different), basically kept my paystubs and did alittle spreadsheet of the income, added it up and then I used TurboTax to inputted the total as a W2, when you don't put in the tax it asked questions on whether this was income earned abroad etc. 

Sorry, I don't know the answer to the rest of the question, you could try Turbotax and see what it comes up with.


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Re: Half Year in US, Half Year in UK Tax question..
« Reply #3 on: March 05, 2009, 02:22:46 PM »
I am not a tax attorney, nor do I play one on TV, however because my DH and I live in an area with LOTS of US expats, this is my understanding.

The US gov't allows you to file for an extension in order to reach the 330 day requirement for foreign exclusions/credits.  I've read that they automatically extend until June 1 (or 30th, can't remember which) if you have a foreign address, but IMHO I would file for the extension to Aug just to be on the safe side.  This advice only applies if you intend on staying outside of the US for 330+ days (e.g. if you were to leave the UK in April for some reason, you would never qualify for the foreign income exclusion anyway, so ignore everything I just said)

NOTE: This is not an extension to pay (if you were to be in a situation where you would owe taxes) but rather an extension to file.  Normal disclaimers apply.

My DH moved to the UK in June 2008, so our plans are to file for an extension and then file for "real" in July.   Downside - we don't get our expected Federal or State refunds until then. 

There must be some advice out there for tallying foreign income and taxes paid for non-coincident tax years, so I would probably google search for that.

BTW, DH and I use TurboTax too... and I experimented with different dates (i.e. go ahead and enter data as if you had completed your 330 day requirement)  to see what impact that will have.

Good luck!

Edited to add: Here is the IRS website with info on the foreign income exclusion and links to the various forms you might need:
http://www.irs.gov/businesses/small/international/article/0,,id=97130,00.html

And here is IRS Publication 54 directed specifically at helping folks who live and work abroad with their tax questions: http://www.irs.gov/publications/p54/index.html
« Last Edit: March 05, 2009, 02:29:32 PM by exjerseygirl »
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”


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Re: Half Year in US, Half Year in UK Tax question..
« Reply #4 on: March 05, 2009, 04:56:16 PM »
All sounds good except that the TD F 90-22.1 cannot be extended so must be filed in Detroit to arrive there by June 30th ...


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Re: Half Year in US, Half Year in UK Tax question..
« Reply #5 on: March 05, 2009, 06:47:16 PM »
All sounds good except that the TD F 90-22.1 cannot be extended so must be filed in Detroit to arrive there by June 30th ...

I find this out of context statement potentially confusing for folks who might be browsing the thread.  This form does not impact OP's or any others' ability to request extensions in order to meet foreign residency requirements for foreign income exclusions.

TD D 90-22.1, for those browsing the thread, is a statement to the US Treasury Department reporting your foreign bank account assets.  It is NOT filed with your taxes, but rather reported to the Treasury's financial crimes unit if you meet filing requirements (e.g. have more than $10,000 in a foreign bank account). 

For more information in plain english see:
http://daggle.com/060629-033547.html
and
http://taxes.about.com/od/preparingyourtaxes/a/TDF90221.htm

and the blurb about the form on the bottom of this IRS website page:
http://www.irs.gov/businesses/small/international/article/0,,id=96796,00.html


“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”


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Re: Half Year in US, Half Year in UK Tax question..
« Reply #6 on: March 05, 2009, 08:33:15 PM »
I find this out of context statement potentially confusing for folks who might be browsing the thread.  This form does not impact OP's or any others' ability to request extensions in order to meet foreign residency requirements for foreign income exclusions.

TD D 90-22.1, for those browsing the thread, is a statement to the US Treasury Department reporting your foreign bank account assets.  It is NOT filed with your taxes, but rather reported to the Treasury's financial crimes unit if you meet filing requirements (e.g. have more than $10,000 in a foreign bank account). 

For more information in plain english see:
http://daggle.com/060629-033547.html
and
http://taxes.about.com/od/preparingyourtaxes/a/TDF90221.htm

and the blurb about the form on the bottom of this IRS website page:
http://www.irs.gov/businesses/small/international/article/0,,id=96796,00.html




Many thanks for the clarification, but the penalties for the TD F 90-22.1 are often much greater than for the tax return - minimum $10,000.

The TD F 90-22.1 now includes all UK debit cards, pensions, unit trusts and even the London Oyster card so it is a real pain but exactly what the IRS are now focusing on. I make no apologies for reminder although I agree entirel I could have worded better! 


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