Is it necessary to file US tax returns if you're not working or earn under $80K?

If an account hits the magic $10K at any point during the year, FBAR kicks in. The form asks for the maximum value of the account during the year, not how long or for what reason. And again, it doesn't matter what the source of the money may be, it's the fact that it is in an account over which you have signature authority.

Don't forget the other essentially duplicate form that had to be filed with the 2011 return. Senior moment....can't remember the form number.

Don't forget the other essentially duplicate form that had to be filed with the 2011 return.

It's Form 8938.
http://www.irs.gov/businesses/corporations/article/0,,id=251217,00.html

The threshold is much higher than FBAR for those living abroad, $200,000 on Dec. 31st, or $300,000 during the year (MFS).

I was going to ask if any tax had to be paid when an FBAR is filed, but the IRS website answers that:

No tax is incurred or paid when an FBAR is filed.  

However, what repercussions will there be from this? I tell the IRS that I had over $10K in my account at one time, when it was actually not MY money, although in a joint account. My husband (UKC, non-USC) earned over $10K for a work bonus and paid (a huge amount of) tax to the Canadian government. What does the IRS do with that? Do they see that I've had over $10K in my bank account and then investigate my tax return situation and see I haven't filed (looks like I don't need to file) and penalise me?

I also need clarification again on whether or not I'm considered "single" when/if I file, as I believe the last answer was incorrect. I looked at the IRS site and it's too complicated to figure out, as none of the examples I found fit my situation. When I've filed before with H&R Block online, I put "married" and then they insisted I must include my husband's SS number on the return and wouldn't let me continue without it. Obviously he doesn't have one, so I just put "single" after several attempts to file as "married, filing separately". My dad (a CPA) said I should be considered "single", since my husband is a non-USC and wouldn't be filing a return, but he wasn't entirely certain.

Sorry for so many questions... it's so complicated and frustrating!

I also need clarification again on whether or not I'm considered "single" when/if I file, as I believe the last answer was incorrect.

In most cases, your status is that as of December 31st. If you are married at that time, you must file for that tax year as either married filing separate or married filing jointly. Some experts in the past have suggested that 'Head of Household' could be used if you are married to an NRA and have children. I cannot clarify this, perhaps others could?

There have been many discussions in previous threads about the problems with tax software not accepting the anomaly of those married to non resident aliens (NRAs). There are ways around it in most commercial software packages.

EDIT to add:
From the instructions to 1040, page 12:
Single
You can check the box on line 1 if any of
the following was true on December 31,
2011.
• You were never married.
• You were legally separated...........
• You were widowed before January 1, 2011, and did not remarry before the end of 2011..........

Unless any one of the three match your situation, you cannot file as single.

There have been many discussions in previous threads about the problems with tax software not accepting the anomaly of those married to non resident aliens (NRAs). There are ways around it in most commercial software packages.

Okay, that makes sense.

My head is about to explode after spending the past few hours reading the IRS site, trying to clarify everything. I need a break! I'm sure I'll be back with more questions. Thank you so much for clarifying these things for me.

I'm going to file the FBAR and tax returns for the past two years, but what is the best way to file for free? Is the FBAR a straight-forward form found on the IRS site that I mail in, or can I submit it online?

My dad was a CPA in the US and told me that because I was only earning a very small amount per year, well below the $80,000 threshold (or whatever the amount now is), I didn't need to file. He never really dealt with foreign earned income, but said that is what he understood the law to be.

My dad (a CPA) said I should be considered "single", since my husband is a non-USC and wouldn't be filing a return, but he wasn't entirely certain.

With all due respect to your dad, just because someone is a CPA doesn't make them an expert in accounting for foreign earnings at an individual level.  As a CPA, I am technically qualified in non-for-profit accounting or government accounting or any number of other things, doesn't mean I am trained or have any experience in these areas.  Your dad is giving you very dangerously incorrect advice.  Please stop consulting him.  Again, this is nothing against your dad, I would give this same advice for anyone consulting a domestic US CPA who does not specifically specialise in expat tax.

If an account in your name has over $10,000 at any point, you must file an FBAR. It doesn't matter who has earned the money.

Just to clarify, it is the aggregate of all your accounts being over $10000, not any one account. 

The new "Overseas American Program" is being launched by the IRS on September 1st. It will only be of use to a limited class of individuals and anyone entering it would be wise to take professional help.

I would always suggest a dual US/UK qualified adviser - and for this program someone who has significant experience in IRS disclosure programs. If you send me a message privately I would be glad to let you know who specialises in this work. 

The new program has significant risks and may not be suitable in these specific circumstances as you used to file (so you knew you had to), but simply gave up. The IRS could interpret this as wilfull behaviour, which is why a robust reasonable cause argument may be a better route in such circumstances.

Could not have said it better.  If anyone wants to make use of one of the voluntary disclosure programs, please do so with professional help.  A lot of people were seriously burned in the last VDP.

If you had very low income, and are under the FIE amount, you will likely not owe any tax and you may not need to engage a professional to prepare the back returns. If you have any tolerance for paperwork, it's not all that horrendous.

I know the professionals will disagree with that, but it's my opinion. When income sources get complicated, then it's time to pay for the professionals. Most of us don't need one IMHO.

No disagreement from me.  When people are under the FEIE threshold, I would really only recommend a professional in the following circumstances: 1) you are filing under a VDP, 2) you have no aptitude for forms or paperwork, 3) you have unusual or large sources of unearned income, 4) you are taking tax relief of any kind on your UK tax return.

However, what repercussions will there be from this? I tell the IRS that I had over $10K in my account at one time, when it was actually not MY money, although in a joint account. My husband (UKC, non-USC) earned over $10K for a work bonus and paid (a huge amount of) tax to the Canadian government. What does the IRS do with that? Do they see that I've had over $10K in my bank account and then investigate my tax return situation and see I haven't filed (looks like I don't need to file) and penalise me?

There are SERIOUS penalties for not filing.

http://www.irs.gov/businesses/small/article/0,,id=159757,00.html#penalties

In most cases, your status is that as of December 31st. If you are married at that time, you must file for that tax year as either married filing separate or married filing jointly. Some experts in the past have suggested that 'Head of Household' could be used if you are married to an NRA and have children. I cannot clarify this, perhaps others could?

http://www.irs.gov/publications/p501/ar02.html#en_US_2011_publink1000220762

Regarding HOH filing status,
You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. However, your spouse is not a qualifying person for head of household purposes. You must have another qualifying person and meet the other tests to be eligible to file as a head of household.

In layman's terms, your spouse must be an NRA, you must not include their details in your tax return, you must not claim them as a dependent, you must have another dependent you will be claiming (i.e. a child).

With all due respect to your dad, just because someone is a CPA doesn't make them an expert in accounting for foreign earnings at an individual level.  

He was the only person familiar with the IRS that I had to consult. He told me he had no clue, but told me what he thought the law was, and what I found on the internet seemed to confirm what I was told.

From what I've found on the IRS site, I don't really need to file any returns since I owe no money, but technically I may be required to (depending on my filing status), so I will.

Just to clarify, it is the aggregate of all your accounts being over $10000, not any one account.  

At one time, my UK account had well over $10K, but that went to a down payment for a home, and at one time, my Canadian account had over $10K, which it no longer does, as that money went into my mortgage. There's a good possibility my Canadian account has been over $10K at other times, though. However, the money is now all in the UK in my mortgage and currently my combined accounts (UK and Canada) do not exceed $10K.

Do I need to file each time my account exceeds $10K? Or is it filed at the end of the year, and I find the maximum it was during the year?

There are SERIOUS penalties for not filing.

I'm going to file now that I know this law, but what I was asking is, what are the repercussions of me declaring this money? What will they do with the information? Are they going to look into it and see if I owe any taxes on it? It's not even really my money (although I know the IRS considers it mine), which is why I'm asking.

My main concern with filing the FBAR is, my husband is a former green card holder and earns well over the threshold for paying taxes. If he still held a green card, he'd owe the IRS quite a bit of money. His brother is in the same position with regards to his green card. He abandoned it, but upon entering the US recently, he was told he still held a green card and, therefore, still had to file a tax return. I'm sure you can understand why I'm so curious as to what happens when I file an FBAR, considering they could easily come back and claim he's still a green card holder, as they did to his brother.

In layman's terms, your spouse must be an NRA, you must not include their details in your tax return, you must not claim them as a dependent, you must have another dependent you will be claiming (i.e. a child).

This still confuses me, though. My husband is a non-resident alien (he abandoned his green card before we were married), so I won't put him on my return, but I need a dependant to file as HOH? I don't have a dependant, so I can't file as HOH and need to file as "married, filing separately"? The IRS site says:
A joint return generally cannot be filed if either spouse is a nonresident alien at any time during the tax year.

From what I've found on the IRS site, I don't really need to file any returns since I owe no money, but technically I may be required to (depending on my filing status), so I will.

Whether you owe tax or not is not the criterion for filing tax. There are income levels that determine whether you should file, but IMHO if you live overseas you should always file to keep up to date with changes in tax law and also make use of your foreign tax credits

At one time, my UK account had well over $10K, but that went to a down payment for a home, and at one time, my Canadian account had over $10K, which it no longer does, as that money went into my mortgage. There's a good possibility my Canadian account has been over $10K at other times, though. However, the money is now all in the UK in my mortgage and currently my combined accounts (UK and Canada) do not exceed $10K.

Do I need to file each time my account exceeds $10K? Or is it filed at the end of the year, and I find the maximum it was during the year?

You file one FBAR for each tax year the aggregate of your foreign accounts was $10k or over.

I'm going to file now that I know this law, but what I was asking is, what are the repercussions of me declaring this money? What will they do with the information? Are they going to look into it and see if I owe any taxes on it? It's not even really my money (although I know the IRS considers it mine), which is why I'm asking.

The FBAR just tells the Treasury Dept about you accounts. You need to change your perspective about your foreign money a bit. It is up to you to declare any interest and gains on your tax return. The FBAR is for information only and should not influence how you file your US taxes as you worldwide income has always been US taxable.

My main concern with filing the FBAR is, my husband is a former green card holder and earns well over the threshold for paying taxes. If he still held a green card, he'd owe the IRS quite a bit of money. His brother is in the same position with regards to his green card. He abandoned it, but upon entering the US recently, he was told he still held a green card and, therefore, still had to file a tax return. I'm sure you can understand why I'm so curious as to what happens when I file an FBAR, considering they could easily come back and claim he's still a green card holder, as they did to his brother.
This still confuses me, though. My husband is a non-resident alien (he abandoned his green card before we were married), so I won't put him on my return, but I need a dependant to file as HOH? I don't have a dependant, so I can't file as HOH and need to file as "married, filing separately"? The IRS site says:
A joint return generally cannot be filed if either spouse is a nonresident alien at any time during the tax year.

Your husband should make sure of his US and US state residency status. Actually you should also check into your US state residency and tax situation too, just to be careful. There are certain tax requirements that someone giving up a Green Card must fulfil , did he file an 8854 expatriation form with the IRS?

So abandonment of the green card isn't enough? He needs to actually file a form with the IRS? This just keeps getting worse and worse! 

Some of the advice in this thread will need to change if your husband is still a greencard holder.  You need to be sure you are giving all relevant facts when it comes to obtaining tax advice.

Revoking your greencard (for tax purposes) is an official process.  Again, regarding taxes, your husband can't have simply just walked away and considered his greencard done with, even if this works for immigration purposes.  The tax rules are complex when it comes to this area (formally called expatriation).  There are three different sets of rules since 2004 and since we don't know his circumstances, he could fall under any of the three.  What I can tell you is that he should have been filing US tax returns and FBARs for at least some of this time (how long depends on which set of rules applies).  In addition, he may still be considered a greencard holder, in which case, he is NOT a non-resident alien.  This may affect how you file your taxes.

It is now time for you to officially get some professional advice and expect it to be expensive.  When I worked in expatriation, we typically charged a minimum of £5000 to properly advise.

http://www.irs.gov/businesses/small/international/article/0,,id=97245,00.html#_Expatriation_On_or_Before June 3, 2_1

Whether you owe tax or not is not the criterion for filing tax. There are income levels that determine whether you should file, but IMHO if you live overseas you should always file to keep up to date with changes in tax law and also make use of your foreign tax credits

This bears repeating. Your income level determines your filing requirement NOT the amount of tax you do or do not owe.  I will deviate from nun's advice slightly.  Focussing on foreign tax credits may be unnecessarily complicate.  However, I do agree with the advice to always file even if under the limits, if anything it starts the statute of limitations for an audit running.

Sounds like when he gets home from work, he's going to get yelled at, considering he was told several times that he needed to legally and formally abandon it... 

Thanks

Sounds like when he gets home from work, he's going to get yelled at, considering he was told several times that he needed to legally and formally abandon it...  

Thanks

You have to satisfy both Immigration and the IRS when giving up a Green Card. By living outside the US for an extended period and not having a US address US Immigration might consider you to have given up your permanent residency status, but you can file form I-407 to make everything official. The IRS have their own criteria to determine your tax residency and will want to make sure you are up to date with your taxes and you comply with their rules regarding deferred compensation and capital gains tax before they allow you to become an NRA. As Sara Smiles says there are a number of different rules and regs depending on exactly when you gave up the Green Card and how long you've had it. Google form 8854 and you'll see that it's quite an involved form.

Is 8854 another form I'm required to fill out?

Is 8854 another form I'm required to fill out?

The 8854 is for US citizens who have renounced their US citizenship or former long term Green Card holders who are no longer US residents. So unless you are considering giving up US citizenship the 8854 is not relevant to you. However, if your husband was once a US permanent resident it may well be relevant to him. He should look at it and see if he meets the various date and length of residency criteria that would require him to file.

Whoa - this is complicated.

Your husband's brother it seems may have failed to file a Form I-407 to abandon his green card. He needs to file delinquent US income tax returns and FBARs; we don't know his circumstances but he may be able to file as a "treaty-based" non-US resident. These returns are highly complicated to prepare. He may also need to file form 8854 and may be subject to one of the varieties of expatriation tax. In his case this is urgent as the immigration guys found him so the IRS could also start looking for him.

Your husband either properly abandoned - in which case he will have a copy of his I-407 - or did not - in which case he is in the boat as his brother.

You are also delinquent and will be disclosing your husband's SSN and address to the IRS and the US Treasury soon. You need to get the story straight as a family before filing.

I have truly seen and advised in many similar cases before; a well drafted reasonable cause argument should probably go with all of the returns and FBARs; this may be worth spending money on with a professional who you can all meet face to face. Until someone has all the facts and a proper timeline it is not going to be possible to advise fully how you should all approach the IRS and Department of Treasury.