US tax questions

I need to get off my rear and file my US taxes but am not sure where to start. I have no US income to claim but have been working here in the UK since September 2019. I know I have to claim that money (right?). I file married but separately as my spouse is a UK citizen.

My main confusion is over my deceased father’s savings account. I’m the executor of his estate and had to close this account last year (didn’t know it existed when he passed in 2018). It was deposited into the estate account (which I opened in July 2019) and it was split three ways (between his 3 surviving relatives).

Do I claim the amount of the savings I received from that account as income?

Also, I usually file a 1040 for US income, is it the same to claim my UK income? Are there any other forms/schedules I need to submit?

Thankful for any help 

I need to get off my rear and file my US taxes but am not sure where to start. I have no US income to claim but have been working here in the UK since September 2019. I know I have to claim that money (right?). I file married but separately as my spouse is a UK citizen.

My main confusion is over my deceased father’s savings account. I’m the executor of his estate and had to close this account last year (didn’t know it existed when he passed in 2018). It was deposited into the estate account (which I opened in July 2019) and it was split three ways (between his 3 surviving relatives).

Do I claim the amount of the savings I received from that account as income?

Also, I usually file a 1040 for US income, is it the same to claim my UK income? Are there any other forms/schedules I need to submit?

Thankful for any help 

You will not owe any tax on the money you received/inherited from your Dad's estate. Any tax due would have been paid to HMRC.  However, it sounds like you were a signatory on his Estate account as an executor.  That account will need to be included in your FBAR filing, and again, no taxes due, but a fine if you fail to report all foreign bank accounts over which you signatory authority. (This is assuming the max amount at any one time of all UK accounts is over $10,000)

You do have to declare your UK income including wages on your US tax return.  If you owe tax on this income you can either claim a foreign tax refund from the UK tax you paid on that income (form 1116), or if your only UK income was wages then you can exclude up to $100,000 (?) of that income using IRS form 2555, (Foreign Earned Income Exclusion). My son's only UK income is wages so he uses the FEIE for simplicity.  I have UK pensions and other income so have to use forms 1116.

Thank you!

The estate account is in the US at my credit union there. It has sat there since I deposited it so HMRC wouldn't have gotten any tax from it, right?

I am the sole signatory on his estate. So I just need to fill out a FBAR for any accounts if they've ever been over 10,000?

Do I still do a 1040? I earn living wage (8.21 an hour and I work part time) but do have some money come out for pension.  I dont earn any other money than through that job. So I would need to do 1116 instead of 2555?

Sorry if these are silly questions as taxes make my brain mush.

Thank you!

The estate account is in the US at my credit union there. It has sat there since I deposited it so HMRC wouldn't have gotten any tax from it, right?

I am the sole signatory on his estate. So I just need to fill out a FBAR for any accounts if they've ever been over 10,000?

Do I still do a 1040? I earn living wage (8.21 an hour and I work part time) but do have some money come out for pension.  I dont earn any other money than through that job. So I would need to do 1116 instead of 2555?

Sorry if these are silly questions as taxes make my brain mush.

If the Estate account is in the USA then it doesn't have to be reported on an FBAR filing.  What I meant about HMRC taxes was that in winding up your Dad's affairs you will have paid, or get refunded any taxes due to HMRC.  With my Dad he died in December and the PAYE coming out of his pension checks was based on 12 months of him receiving that monthly amount so he was actually due a small refund on his income taxes. With the sale of his house and possessions he was well below the exemption for Inheritance Tax so when the residue of his estate was paid out to myself and 3 siblings all taxes had been accounted for.

If you have other accounts in the UK then they will have to be reported on an FBAR and the arithmetic they use is not real.  If your checking account at one point held a maximum of $7,000 and you transfered $5,000 of it to a savings account then the amount of money you have is still $7,000 but for FBAR purposes it is $12,000. The conversion rate to use is published each year by the Treasury and it is their rate on December 31st.
https://fiscal.treasury.gov/reports-statements/treasury-reporting-rates-exchange/current.html

Sounds like you only have wages as income so you need, I believe, to report the gross amounts before the pension is taken out, and I personally would use the FEIE form which excludes it all and is easier to do than a Foreign tax credit.

You do complete a 1040. (Since you are a US citizen so are always considered resident for tax purposes)

Thanks so much @durhamlad!

Am I looking at how to determine if I need to file FBAR correctly?

I looked at both my individual checking account (UK) and my joint account with my husband (UK) and wrote out what the highest balance was in both of those accounts for each month.

If that's correct, those 2 accounts held was a maximum of £1,300. Even with that converted into US dollars it isn't near the $10,000.

So does this mean I don't file an FBAR?

Am I looking at how to determine if I need to file FBAR correctly?

I looked at both my individual checking account (UK) and my joint account with my husband (UK) and wrote out what the highest balance was in both of those accounts for each month.

If that's correct, those 2 accounts held was a maximum of £1,300. Even with that converted into US dollars it isn't near the $10,000.

So does this mean I don't file an FBAR?

That sounds correct to me.

Thanks again @durhamlad

FBAR – just bank accounts?
While all of these items will not each affect you; an FBAR might report many more kinds of accounts than just bank accounts. An FBAR may need to report pension plans, debit cards, credit cards, pre-paid credit cards, electronic wallets, share registrars (such as Equiniti, Computershare and Link Asset Services),  PayPal accounts, money transfer accounts, online gambling and lotteries, National Savings & Investments accounts, accounts with online or app based challenger financial institutions, insurance plans, investment accounts, ISAs, cryto asset accounts – including Bitcoin – along with several other kinds of financial accounts that might not be entirely obvious.
It can be helpful, therefore, in finalising an FBAR to look through the official FBAR reference guide here:
https://www.irs.gov/pub/irs-utl/IRS_FBAR_Reference_Guide.pdf.

Form 2555 questions:

is it better to do bona fide or physical presence? in 2019 I was only out of the country for a total of 9 days

Part III, do I say January 1-December 31 for the dates on line 16? I haven't filed this exemption before.

Part VII line 38, I calculated my days as 356 (365 days minus the 9 days I visited the USA in 2019)
On line 39, do I enter 0.975?

I have 1040 and Schedule 1 done and ready but this 2555 is making me feel so dumb.

Tax gurus, bless me with knowledge please