First time filing from the UK

Hi guys, I just have a few questions. I've tried calling the IRS in London but their hours don't align with my work schedule.

I just moved to the UK in November 2010 on a marriage visa. I started work in Glasgow in December 2010. My questions are these:

1. I tried to use H&R block online like I normally do, and since I got married in the U.S. I tried filing married filing separately. However, it won't let me file without supplying a social security number for my husband, who is a British citizen. How do I overcome this?

2. Since I worked the last 2 weeks of December in the UK, do I need to do something to report this income? I was just issued a P60, do I need to submit that at all?

3. I'm a bit confused about the rules surrounding the foreign income tax credit. Who's eligible?

Thanks in advance for the help

Hiya
I only know the answer to 1 and that is that you can't efile with an NRA (non-resident alien) spouse. My husband recently used turbo tax to fill out his return, he filed as married filing seperately and had to print all the forms out and then write NRA where it asks for the spouses SSN.

You need to report all worldwide income, and that includes the very end of 2010 when you were working in the UK. Look at your payslip and convert your income into US dollars to find out how much you need to report. Don't worry about sending any documentation to the IRS, just keep your payslips in case of an audit.

You have two options to reduce the tax liability from your UK earnings:

You can take a part-year foreign earned income exclusion. You qualify for this by being physically present outside the US for 330 full days within a period of 365 days. Look here for more information from the IRS: http://www.irs.gov/publications/p54/ch04.html. You'd need to request an extension until you've been in the UK for long enough to qualify, then file your 2010 tax return at that point. You request the extension by sending Form 2350 to the IRS. Note this is a special extension intended for people taking the foreign earned income exclusion only, and is not the same extension that anyone can get.

If you paid enough UK income tax, you may choose instead to take a foreign tax credit, described here: http://www.irs.gov/publications/p514/

You'll need to do the calculations for both the exclusion and the credit to determine which is more advantageous for you. There are a lot of past threads in this forum on the subject.

If you itemize deductions (and since the amount is for only two weeks) it may be simpler for 2010 to include it (the UK tax) in the itemized deductions. It’s not a tax efficient method, but if the tax paid is a small amount (subjective) it may be simpler for 2010 if you’re preparing the return yourself.

A warning: If you would normally use the standard deduction, filing Schedule A may not be the best option.

If you owe any tax for 2010 (from January to November in the US) and wait to file the return with Form 2555 when you qualify (October 2011?), you will be charged interest on the amount due from April 18, 2010 (unless you’ve pre-paid). If you owe any US tax for 2010 due to the UK earnings, Form 1116 may be the most expedient method.

From the instructions for Form 1116 (page 1):
“Instead of claiming a credit for eligible foreign taxes, you can choose to deduct foreign income taxes. Form 1040 filers choosing to do so would deduct foreign income taxes on Schedule A (Form 1040), Itemized Deductions.”

thanks guys, i really appreciate the posts. the government terrifies me, so i'm just trying to do everything as it's supposed to be i'm going to print everything and write NRA on it, so I don't have to get my husband a social security number. it doesn't make sense for him to have to pay taxes when his income wasn't earned in the US.

the tax i paid in the UK for december was under £500, so i think it makes more sense to include it in the itemized deductions. i normally do file using the standard deduction since it's simpler and i don't have much to claim, and i always get a refund. i've never had to pay the IRS during tax time. i don't think i need to worry about that bit since i always had the maximum taken out of my pay checks.

thanks for the advice