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Topic: Moved to UK halfway through year, where to put foreign income?  (Read 1278 times)

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Hi everyone,

I searched through old posts for this issue but couldn't find. Surely it is a popular issue, so here goes. As far as I can understand, if your tax home is in the UK and you physically lived in the UK for a full year (bona fide resident) or 320 days (physical presence test), you put foreign income on IRS form 2555 (the foreign income exclusion form).

However, my family and I moved to the UK in July 2012 such that our tax home is the UK but we don't satisfy the other criteria and therefore can't fill out the 2555 foreign income exclusion form.

Where then do we report foreign income and foreign taxes paid?

Thanks in advance for any help!!!


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Re: Moved to UK halfway through year, where to put foreign income?
« Reply #1 on: April 06, 2013, 10:05:46 AM »
Great question! You either don't bother with the 2555 at all and simply claim foreign tax credits or, alternatively, you wait until the 330th day and file then.

Run the numbers both ways to see which gives you the bst answer.


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Re: Moved to UK halfway through year, where to put foreign income?
« Reply #2 on: April 06, 2013, 03:46:23 PM »
Oh OK, thanks very much. I think to claim them as a credit I need to fill out form 1116 but it doesn't seem to give me a dollar for dollar credit. More of a percentage.


Thanks again!
 


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Re: Moved to UK halfway through year, where to put foreign income?
« Reply #3 on: July 16, 2013, 09:27:59 AM »
Just to update this thread, I called the IRS in London. After waiting and waiting, I got some extremely good and thorough help from someone at the office.

Because we lived in US for ~7 months in the 2012 tax year, we used the form 1116. I also claimed the foreign tax paid credit. That gave the best outcome for us.



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Re: Moved to UK halfway through year, where to put foreign income?
« Reply #4 on: July 18, 2013, 10:15:28 AM »
Just to update this thread, I called the IRS in London. After waiting and waiting, I got some extremely good and thorough help from someone at the office.

Because we lived in US for ~7 months in the 2012 tax year, we used the form 1116. I also claimed the foreign tax paid credit. That gave the best outcome for us.



Woo!  ;D :P


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