Pop the champagne I just filed my first FBAR

If you are filing jointly then you must include all yours and your spouses accounts. If there is any UK tax liability the situation gets tricky as in the UK there is no joint filing. I have no idea how you handle that situation.

Why are you transferring so much money to UK accounts. I'd keep most of it in the US until it is needed in the UK. If you are buying a house I'd do a direct wire transfer from your US bank to a UK bank....unless you need something like a cashiers check.

I seem to remember your spouse is non a US citizen....if so you have an opportunity to keep money in accounts that are outside the scope of the IRS, are you taking advantage of that? I would keep enough money in the UK to cover your expenses and probably try to keep UK accounts with a US connection ie you, below $10k

When you say "in which you have signature authority" .....I would assume that since I am reporting married/jointly for 2014+2015 I would still have to include my wife's bank account? It's only in her name though. It's not until 2016 that I hope to fall back to filing separately.

As far as the 8938 goes......guess we'll have to see. If we get everything sold that we hope to we would be over the $400k minimum limit at the end of tax year, but under the max of $600k at some point during the year. We still plan on renting for at least 6 months if not longer to see if that area we are planning on is as good as we hope. That would put us a little over $400k at the end of 2015....damn....another form to fill out. But.....better that than to foolishly buy a house too soon (done that a couple of times) just to avoid filling out a form. We just want the money sitting there in case a house comes up that is perfect.

For FBAR you wouldn't have to report accounts in your wife's name, only joint accounts. Our UK bank account is only in my name so my wife never has to file FBAR.  Even married folks can have personal accounts that the spouse can't touch.

For FBAR you wouldn't have to report accounts in your wife's name, only joint accounts. Our UK bank account is only in my name so my wife never has to file FBAR.  Even married folks can have personal accounts that the spouse can't touch.

The OP and spouse are filing "married/jointly" that opens up the NRA to US taxation and FBAR.

OP I thought we had discussed this. If your NRA spouse chooses to be treated as a US tax resident and files jointly with you, then you have to stick with that for future filings. I would strongly urge you to think about how you and your spouse will file. The usual thing to do is file separately if you have an NRA spouse.

The OP and spouse are filing "married/jointly" that opens up the NRA to US taxation and FBAR.

OP I thought we had discussed this. If your NRA spouse chooses to be treated as a US tax resident and files jointly with you, then you have to stick with that for future filings. I would strongly urge you to think about how you and your spouse will file. The usual thing to do is file separately if you have an NRA spouse.

So true, if her accounts are above the reporting threshold then she will have to file an FBAR report if she is filing a US return, which she will be if they are filing "married/jointly".  My mistake.

So if I file jointly this year 2015......hopefully we move this Spring......I will be stuck forever filing jointly when we move back? I'll have to look that up. Any idea where in the IRS files that one is? If not I will try to track it down. We have already been filing jointly (for the last 7 years) while we were married and living in the UK.....then back here in the US.

My idea on moving a lot of money now......was because I figure how long will the Pound stay down this low? Just a few months ago it was over $1.70. Could go lower of course.......but I wouldn't bet on it staying this low forever. In a year or two it could be back up to $1.70. What's the difference between $1.51 and $1.70 on $400,000? Around 300K Pounds even in an interest bearing account is tax free to my wife.....no way to get anywhere near the 10,600 Pound limit. The interest rates on savings accounts in the UK are at least as good as the US last time I looked. Leaving the money in the US would seem to bring in a fairly big chance things could swing against us in the exchange rate down the road. Is it better to lock a lot of that money in now.....or take the risk? Can't really do anything about my TSP money and what would be left in the Vanguard funds so the exchange rate will be whatever it will be a couple of years from now and beyond. As I said earlier.....right now, my wife's account in the UK gets zero interest. Why? Damned if I know.....that's just what she put it to before we left (she only had less than 1,000 Pounds in it at that time....enough to write checks to the the kids etc) and now we can't change it since we have no UK address. Maybe I am again just over-thinking this whole thing.

Are my plans so far a total screw-up? Boy....I really need to double check this not being able to move back to filing separately rule.   

So if I file jointly this year 2015......hopefully we move this Spring......I will be stuck forever filing jointly when we move back? I'll have to look that up. Any idea where in the IRS files that one is? If not I will try to track it down. We have already been filing jointly (for the last 7 years) while we were married and living in the UK.....then back here in the US.

If you are a US citizen and you choose to file jointly at any time with an NRA spouse then that NRA spouse is treated as a US resident alien. There are some limited ways to get out of the choice, but I think your original decision to file jointly while previously in the UK might be a problem. The rules are on page 9 here.

http://www.irs.gov/pub/irs-pdf/p519.pdf

This is why it is so important not to file jointly if you are married to an NRA, at least until you fully understand the tax implications.

My idea on moving a lot of money now......was because I figure how long will the Pound stay down this low? Just a few months ago it was over $1.70. Could go lower of course.......but I wouldn't bet on it staying this low forever. In a year or two it could be back up to $1.70. What's the difference between $1.51 and $1.70 on $400,000? Around 300K Pounds even in an interest bearing account is tax free to my wife.....no way to get anywhere near the 10,600 Pound limit. The interest rates on savings accounts in the UK are at least as good as the US last time I looked. Leaving the money in the US would seem to bring in a fairly big chance things could swing against us in the exchange rate down the road. Is it better to lock a lot of that money in now.....or take the risk? Can't really do anything about my TSP money and what would be left in the Vanguard funds so the exchange rate will be whatever it will be a couple of years from now and beyond. As I said earlier.....right now, my wife's account in the UK gets zero interest. Why? Damned if I know.....that's just what she put it to before we left (she only had less than 1,000 Pounds in it at that time....enough to write checks to the the kids etc) and now we can't change it since we have no UK address. Maybe I am again just over-thinking this whole thing.

Don't worry about exchange rates. They are just like trying to time the market, you'll send yourself batty. The thing I'd get sorted is your spouse's IRS status given the previous joint filing when she was an NRA. I worry that she will not be able to claim to be a non-US resident for Tax Treaty purposes. It probably won't increase the tax you pay as she'll be in the same situation as a US tax resident with foreign accounts and you can use foreign tax credits, but it will complicate your returns and wipe out the tax advantages of ISAs and restrict UK investment choices. I'd probably talk to a professional on this one as it's very important to your planning.

Just read through that IRS section.....might have to do it a few million more times. But what I took away was that I can switch back and forth for a particular year. Maybe I am just mixing things up.....definitely need to go through it again. But what I am reading is that we can change, but my wife would need to "revoke" her filling with me as joint by submitting a note saying she was doing so. Below are a couple of cut+pastes from http://www.irs.gov/pub/irs-pdf/p519.pdf page 9

You must file a joint income
tax return for the year you make the choice, but
you and your spouse can file joint or separate
returns in later years

1.
Revocation.
Either spouse can revoke
the choice for any tax year, provided he or
she makes the revocation by the due date
for filing the tax return for that tax year.
The spouse who revokes the choice must
attach a signed statement declaring that
the choice is being revoked. The state-
ment must include the name, address, and
identification number of each spouse. (If
one spouse dies, include the name and
address of the person who is revoking the
choice for the deceased spouse.) The
statement also must include a list of any
states, foreign countries, and possessions
that have community property laws in
which either spouse is domiciled or where
real property is located from which either
spouse receives income. File the state-
ment as follows.
a.
If the spouse revoking the choice
must file a return, attach the state-
ment to the return for the first year the
revocation applies.

Yes I would certainly try that if you want to file married/separately in future.

Just one small thought. You mention that you've been filing for 7 years married jointly with your wife both in the UK and the US. Make sure there are no expatriation issues for your wife if she has a green card as you become a LTR after 8 years of lawful permanent residence. If she's giving up the green card make sure she satisfied both the INS with I-407 and IRS with 8854 (if necessary) and then the appropriate final 1040 and an attached statement to get out of joint filing if you're wife wants to be free from the IRS.

Thanks nun- expatriation (8854) I am not concerned with at this time. Who knows how I will feel in 5+ years. I don't "think" I will be coming back to the US very often once I move that way. I have 2 older brothers that aren't very healthy so if they go I likely won't bother to come back at all....and I don't plan to come back for a visit for at least 3 years anyway.

Now the question is what to do for THIS tax year. I sold off a bunch of Vanguard back in Sept (about $120K) to get the bank balance well up over the 62,500 Pound requirement. The question is whether I go ahead and file jointly or not for 2014 because of the Capital Gains from selling that much......although I would tend to think since I had only been in Vanguard for a couple of years that the CGains on $120K wouldn't be THAT much. The only reason I can see to file separate for 2014 is so I don't have to fill out the FBAR for the money we put in my wife's account (40k Pounds). Then if we decide to file separate for 2015 I can just sell off a little less than I was planning now.

On another point.....did anybody think my plan for moving a lot of money over now was overly stupid? Yeah....I know you can drive yourself a little nuts worrying about the exchange rate......but I have a tendency to be a bit of a "mild" market timer with my TSP money as it is. When the markets go way up I move a little of my C fund (stocks) over to the G fund (can't lose money and "only" getting 2% right now). When goes kaput like it did in October I move some back to the C fund. I can't help but think with the exchange rate like it is that it would be a bit foolish not to take advantage of it. Although....I was in the UK back in the 1980-87 and I remember the exchange rate going basically 1 to 1 for a little while. While things could go better in the future and the rates could go lower......I am tempted to just lock in at a decent rate soon (if I sell off some more Vanguard) and again if the rates are like they are in a few months if/when the house sells and we move. If the rates go back up it is more of a concern than if they go further down. If the rates go down further I will basically go "oh shucks" and carry on. If they go up and it rips away at the money we need.....that will hurt.

Exchange rates are always a guess and who knows where they will move this coming year, and in a UK election year.

I think rates are very good at present for moving stuff over, so I think your plan is pretty good.

If this seems overly-complicated, don't feel bad. We've had reports here of US based CPA's who made a mess of these instructions.

Just read through that IRS section.....might have to do it a few million more times. But what I took away was that I can switch back and forth for a particular year. Maybe I am just mixing things up.....definitely need to go through it again. But what I am reading is that we can change, but my wife would need to "revoke" her filling with me as joint by submitting a note saying she was doing so. Below are a couple of cut+pastes from http://www.irs.gov/pub/irs-pdf/p519.pdf page 9

You must file a joint income
tax return for the year you make the choice, but
you and your spouse can file joint or separate
returns in later years

You have an NRA spouse, and file jointly thereby "electing" for the NRA spouse to be treated as a US resident and a US Person. If you later decide to file as married separately (with the NRA spouse NOT filing a US 1040 return), then you must file a "revocation of election" for the NRA spouse to NOT be treated as a US resident/US Person. You may only do this once (elect/de-elect) with this particular spouse.

What the wording above means is that if the NRA spouse has elected to be treated as a resident/US Person, you may then file MFS or MFJ, but the catch is both must file a US 1040 return every year the election is in place. One can not file MFJ one year, and then the following year one file MFS and the NRA not file, and then the following year, both file MFJ again if the election has not been revoked (except for certain circumstances such as divorce or death).

1.
Revocation.
Either spouse can revoke
the choice for any tax year, provided he or
she makes the revocation by the due date
for filing the tax return for that tax year.
The spouse who revokes the choice must
attach a signed statement declaring that
the choice is being revoked. The state-
ment must include the name, address, and
identification number of each spouse. (If
one spouse dies, include the name and
address of the person who is revoking the
choice for the deceased spouse.) The
statement also must include a list of any
states, foreign countries, and possessions
that have community property laws in
which either spouse is domiciled or where
real property is located from which either
spouse receives income. File the state-
ment as follows.
a.
If the spouse revoking the choice
must file a return, attach the state-
ment to the return for the first year the
revocation applies.[/color]

This is the one time revocation, meaning they can never re-elect to file MFJ again.

Yes I would certainly try that if you want to file married/separately in future.

Just one small thought. You mention that you've been filing for 7 years married jointly with your wife both in the UK and the US. Make sure there are no expatriation issues for your wife if she has a green card as you become a LTR after 8 years of lawful permanent residence.

For F4m's sake, let's make this more specific.

Green card holder goes to the States and becomes responsible for tax reporting on 01 December of year "A". This one month (December) means year "A" is now one full year for the computation. They remain in the US for years "B, C, D, E, F, and G" (six complete years). They leave the US on 31 January of year "H". The one month (January) means year "H" counts as 1 complete year. Therefore, they have 8 years LTR for the computation.

IMHO.

Thanks nun- expatriation (8854) I am not concerned with at this time.

I think nun was referring to your wife. If she is an LTR (as described in the above post), then she must file a 8854 to be free of the US tax system. If she is an LTR and doesn't file 8854, she will still be responsible for filing a US tax return, even if she has 'checked out' regards the Green Card with US immigration.

theOAP- You sound confident of things on this......hope so.

1. If we can sell the house and get outta here this Spring....my wife and I will have only been in the US 4 years (4 years the middle of June this year) so the LTR issue should be zapped.

2. I am assuming that 8 year rule is only while we are living in the US? We are just coming up on our 8th year anniversary 10 Feb. The LTR starts with the Green Card (2011)? which is basically the same time as we have been in the US? 

3. So if I am able to revert back to filing separately.....can I do it for 2014 or do I have to wait for 2015 or later? I was kind of planning on waiting until either this year(2015) or next year so I could sell off as much of my Vanguard as possible to get a money stash to buy a house in the UK sometime in the next year or two. Ifffff I can do it for 2014 then I guess I will need to check to see how much my CGains were on the funds I sold this last September ($124K). Hopefully the Vanguard tax forms should have that on it. If I can keep my CGains on the $124K down far enough I would just file Separately for 2014.

This process......although I am clicking the pieces slowly together, (I feel someone has stolen a few pieces out of the jigsaw just to see if I go insane)......is steadily more confusing than thought. It really is a case of the more you learn....the less you realize you know. Just when I think I kind of understand things....someone throws out something else important that I just didn't know about. I am really starting to think that there are very few accountants/tax people etc. that would be able to keep all this info straight.

As to the cap gains from September last year, can you not simply log onto your Vanguard account and for the account where you sold shares last year click on the appropriate tab to see your realized gains for the year?

I find the VG site very easy to use and see unrealized and realized short and long term gains and losses for each fund.