Please help: US citizen married to UK citizen, living in England, trying to file

Hi All,

I'm an American citizen, married to my British husband, and we're living in England for the forseeable future.  We married in Pennsylvania in June 2006 and I moved to England in late June 2006. 

I'm trying to fill out my tax forms--- Forms 1040 and 1116.  Are these the correct forms, first of all? 

I've gotten to the second question on Form 1040 and don't know how to answer.  Do I file as Single? Married (separate or joint)?  UK husband does not have SSN and will not be filing as he never has had any income in the US.

Please help! 

Thanks,

Kristen

Hi Kristen

1. You'll probably need to file as Married Filing Separate unless you want to elect to include your husband's income (most people in your situation do not make this election).
2. You'll probably also want to file form 2555 to claim the foreign earned income exclusion. but as you haven't yet been outside of the US for 330 days you can't file yet claiming this exclusion.
3. You'll presumably also need to file a State tax return.
4. You may need to file form TDF90-22.1.

Thank you guya 

I called the IRS Philadelphia Service Center office (phone: 215-516-2000) and they told me to file Forms 1040 and 1116 (foreign tax credit).  They said I must report all income from all work in the US and UK using the conversion rate of  1.8434 = 1 pound   to add my UK income to US income and write this figure on line 7 on 1040.  I should always use gross figures to do this.  I should attach all W-2 forms and a separate sheet showing how I figured out my UK income (converted to US dollars).

On line 47 on page 2 on 1040, I should put my foreign tax credit that I worked out using Form 1116.

After all this, I should mail these two forms to:

Internal Revenue Service Centre
Austin, Texas 73301
U.S.A.

Before sending, however, I should save a copy for my records. 

I'm just asking if this is exactly what I need to do as the IRS guy I spoke with was rushing me along and seemed as if he just wanted to hang up.

What else must I include besides my W-2 from my job I had in the US before I left?  I still have a few bank account in the US but the interest isn't more than a few hundred dollars a year.  I don't know if my parents have any bank accounts or other assets in my name---how do I find out if they do?

I am going to do my best with the information I have to file my taxes in the most honest way I can.  What if there are assets that my parents have that I don't know about.  My move to England proved to be too much for my parents to handle and there has been a severe rift.  We are not communicating and I wouldn't trust what they have to say about family money anyway.

To respond to your post, where do I get a State Tax Return?

How do I know if I need to file a TDF90-22.1 and Form 2555?

To file "Married Filing Separately", I am to include my husbands SSN, but he doesn't have one.  Do I just cross off the space for his SSN, but just include his full name?

I don't think I will file including his wages as both of us are working fulltime and support ourselves with out own income.  Is this sensible?  Are their any benefits either way?

Any advice would be gladly received.

Kind regards,

Kristen

2. You'll probably also want to file form 2555 to claim the foreign earned income exclusion. but as you haven't yet been outside of the US for 330 days you can't file yet claiming this exclusion.

I'm confused..I moved to the UK in May last year and have worked in the UK since June of last year.  Because I haven't been here for 330 days I can't use the income exclusion?  Does this mean I must pay US tax on UK earned income?

I moved here in June and will be applying for the 6 month extension which should be easy to get if you live in a foreign country, (even though I won't use the whole 6 months) in order to qualify for the 330 days physical presence so that I can exclude my UK income. I spoke to the Philadelphia office and they were very helpful.

So, its not the tax year they use to calculate the 330 days, but when one actually files? I think we have until June to file anyway (I remember reading that somewhere), so I think I should be okay for the 330 days.

I may file an extension anyway, as I'm going to be going studying for exams in May/June and I"ll be in the US at the end of June, so I'd rather send my forms then.  How do you file an extension..do you know the form name?
Thanks

Hi Yael, Smootie and Kristen

Most of what you are asking is covered here (do also click on the other items down the left hand side of the page).:
http://london.usembassy.gov/irs/irsfaq.htm

Hi, I'm in a similar situation to the original poster, but wanted to know a little more about why most people choose to file married filing separately?  A tax specialist I spoke to on the phone for 2 minutes said we would probably want to file out US taxes jointly, but I didn't ask her why (in a conv during which I concluded that she was too expensive for me to engage, but she gave me some free pointers).  More detail--which I know will only lead you to tell me I need to hire someone:

Wife, US citizen, husband UK citizen w/a green card, both moved to the UK last January.  For the US 2006 tax year, wife had minimal US investment/interest income, plus about $20,000 of self-employment income, all done in the UK for a US company, which paid her US account in dollars.  Husband had a small amount of US income from before the move and the rest of the time was paid by a UK employer (so presumably his UK tax is taken care of).    Wife has spent about $6,000 in the UK, none of which was "cleaned," if that takes any amount of effort, but otherwise has been sponging off of husband.  Wife has registered as self-employed and secured a National Insurance number.

Wife knows she should hire someone, but is a lawyer and so far isn't convinced she can't figure this out (with a little help).

Thanks in advance for your help!