Dual citizen tax Q..

Sorry you guys...Another tax Q here.  I forgot to ask it last time.  I am a US cit, thinking of getting swedish cit as well.  Now my Q is this---if I move to the UK, I am filing US tax returns every year correct but shouldnt have to pay anything as long as my income is less than 80,000 right?  I will also have to file swedish taxes too correct?  The tax is automatically taken out in the UK by the UK right, meaning I wont need to fill out any forms for the UK as well?  Or is all that totally too confusing for anyone to understand and completely wrong?  I am soooooo sorry to be so inarticulat.

Basically who the heck am I filing taxes for?  US, UK *and* Sweden?

I'm no expert but here's what I do know. Yes, you always file in the US. And techincally you can earn more than 80,000 and not owe tax. You are allowed to exclude up to 80,000 of your income. If you earn more than that or have a tax liability in the US then the foreign taxes you paid to Sweden or the UK would kick in. The IRS gives you a dollar for dollar credit against your US tax for that amount. The theory being so that you are not double taxed.

My understanding is that if you live and earn $ in the UK you would file there too.

The US is pretty unique in taxing world-wide income of it's citizens, most countries say that if you didn't earn money there then no taxes. So you may want to check on that for Sweden.

1)  US.  You must file a US tax return every year.  The fact that you will owe no tax is not an exemption from filing.  The $80,000 exclusion is only valid with a timely filed return.  You could elect not to file, and just wait until you "have" to, but then you run the (very small) risk that the IRS may reject your $80,000 tax free exclusion on the grounds that it was filed after the due date.  While I have never seen them actually do this on a late filed return, they do have the right to do this.

2)  Sweden.  Once you leave Sweden, you only have to file Swedish tax returns on rental income from Sweden.  You may also have to pay tax on the sale of Swedish real estate that occurs after you leave.  If you salary is from Sweden, there are tax breaks that would allow you to tax it in either UK or Sweden, depending on the particular circumstances of your case.  All your other Swedish and UK income would be tax-exempt in Sweden.

3)  UK.  You file an annual UK tax return in the UK if you have any income or expenses not covered by your withholding.  The UK withholding is very accurate, and you shouldn't need to file if you are on a UK payroll having UK tax withheld and have no other sources of income.

Be wary of having investment income.  The UK has a very creative system for avoiding tax on investment income.  If you have a lot of investment income, you should seek professional guidance.

Wow...that's pretty insightful, thanks alot!

Something that bother me, I have lived here for 5 years now and not worked.  Not once.  Not even babysitting or scraping gum....I have virtually had no income aside from the stipend the government gives us for our children which amounts to around $400/month or so.  My Q is this--I havent filed any income tax for the US since 1999.  The last time I worked was in December 1999.  I, of course filed for 2000 (I think it is...) but I havent filed since.  Am I in deep trouble???  I havent made a cent and dont really know how to prove that if they needed to know.  The reason I didnt file is I called the IRS back in 2000 and they said specifically there was nothing I needed to do.  Was I told wrong?

No one has to file if they don't earn any money, so no, you're not in trouble.

The filing limit is approximately $7,800 for all income (combined).  The filing limit is adjusted annually for inflation, so the exact figure changes each year.

Well alright..then I can breathe a sigh....