First Time Filing... Freaking Out!

Hello All,

I moved here on a Spousal visa in September 2008 and also started working full time from the end of Sept 08 to now. I have no idea where to even begin on sending my tax info to the US... Do i file single or jointly? Does my British wife need to fill anything out?

Im really confused and worried sick that its going to be too complicated for me to handle. I think I earn about £16,000 per annum so its not much.

Help!

If you don't earn much and don't have investments to complicate things, it's actually really easy to file. You should file married filing separately and put NRA (non-resident alien) for your spouse's SSN. Fill out the 1040 and 2555-EZ, and if you have interest income over the threshold or bank accounts in the UK whose combined totals go over $10,000, a Schedule B and TD F 90-22.1. Your spouse doesn't need to fill out anything unless she has taxable income in the US.

Everything the Dr says is true.  Also, you have an automatic 2 month extension, so you have until June 15th to get your forms in. Just write Taxpayer Filing Abroad across the outside of the envelope. It's much easier to do them than you would think. You can download an information packet for residents living abroad from the IRS website that will answer any questions you have. It's all very straightforward, and takes a bit of time to read through the packet, but well worth it, as once you have done it once, you will know how to do it every time. Also, the exchange rate they want you to use to convert your UK salary to US dollars is on the IRS site, you can just search for exchange rates and it should pop up. You just use that to figure up your salary in US dollars and then list the amount on your 2555-EZ form and again on the 1040 in the appropriate place (it will tell you where to write it). Don't stress! 

Ah this is a huge relief! Ill get it sorted asap.

The only other problem is that Ive lived here for part of 2008 (from Sept 2008 onwards). I was living with my parents up until the beginning of September, so I got my W-2 from my employer for the 2008 tax year (I still have yet to file my prior year taxes...)

How do I sort out taxes for this bit? Do I just add my income from Sept-Dec on as well?

-Adam

Oh, I'm not sure, but I assume if you didn't file last year, then you will have to file for 2008 and include the income you earned in the UK from Sept - Dec 2008 on your tax forms. It doesn't sound like you would meet the criteria for foreign earned income exclusion for 2008, though (you need to have lived abroad for a certain number of days before you qualify for that) so not sure how that affects your situation. You should be able to work this out from that info pack on the IRS site, though, I would think, and you can download booklets from previous years, as well, I believe.

Oh, I'm not sure, but I assume if you didn't file last year, then you will have to file for 2008 and include the income you earned in the UK from Sept - Dec 2008 on your tax forms. It doesn't sound like you would meet the criteria for foreign earned income exclusion for 2008, though (you need to have lived abroad for a certain number of days before you qualify for that) so not sure how that affects your situation. You should be able to work this out from that info pack on the IRS site, though, I would think, and you can download booklets from previous years, as well, I believe.

I'm still in the US but have been paying attention to the tax stuff lately since it's been busy here. I'm pretty sure that the FEI exclusion will apply for 2008. It's written such that if you have a 365-day period beginning in a given year in which you're in a foreign country for at least 330 days, you can claim the exclusion. You just have to get the period under your belt before you can claim the exclusion, you don't need 330 days in a given calendar year. That's why 2350 exists, to get an extension until you meet the physical presence test. (I move in September 2010 so will have to extend my 2010 taxes until I can get FEI exclusion for the time in 2010.)

Whoa hold up. What is this FEI business? Im confused.

Whoa hold up. What is this FEI business? Im confused.

Foreign Earned Income exclusion http://www.irs.gov/businesses/small/international/article/0,,id=97130,00.html

For tax year 2009, it allows you to exclude up to $91,400 of your earnings that were earned in a foreign country, provided you meet certain criteria. There's also a tax credit for taxes paid to a foreign country that you could choose instead.