Will this tax filing plan pass muster?

Since my income tax situation is very simple - interest, dividends, and a small pension income - I'm hoping I can keep the filing simple as well.  Yes, I know, "filing taxes" and "simple" are not generally used in the same sentence.   

I've been here in the UK, on a fiance visa, since Oct. 1, 2014 and my divorce was final early in 2014.  My fiance and I will marry in March 2015, so my 2014 status is single. I plan to file using TurboTax online, and my daughter's California address (my previous state of residence).  Will this cause any problems I should know about?

Thank you for any feedback/advice, this forum is simply priceless.   

You should be able to use TurboTax or for that matter any other tax software of your choice. It sounds like both your federal and state tax returns should be relatively simple, but you will only really know once you give it a shot yourself. Make sure you do the CA return as a part year resident.

No issues for now if you are on a fiance visa, just file as normal.

Once you get married where you and your spouse decide to live will definitely change your taxes.

If you stay in the UK (I assume you qualify for a spouse visa) you will be liable to UK and US taxes and will have to evaluate what you want to do about CA taxes. You should probably file "married separately" and avoid joint ownership of accounts......at least if you love your spouse.

If you apply for a GC for your spouse and move to the US taxes will probably be simpler as the UK taxes can be easily eliminated.

Thank you both for your replies, very helpful!  A couple of clarifications if you don't mind.....

politicfool, if I'm using my daughter's California address as my address, won't I have to do the CA return as a full year resident?

nun, I cracked up at your comment about avoiding joint ownership of accounts.  LOL - Yes, dragging anyone into US tax (or other) jurisdiction would not be a very loving thing to do.  However, are you referring to any joint account ownership?  We have talked about opening a joint checking account here in the UK to make household finances a bit easier, would that not be a good idea?

Oh.... and we have no plans to live anywhere else but the UK.

A few thoughts .... we don't know if you have employment income to report, but if you do and you want to claim the foreign earned income exclusion you would be filing about 9 month too early.  

The same 330 day test is relevant for new Form 8965 that you'll have to file for 2013, but the instructions are unclear if you'd also have to wait to qualify before filing Form 8965 as one has always done with Form 2555.  It appears likely that you simply can't file the Form 8965 for 2014 claiming exemption code C until you have met the physical presence test, so you can't file at all for 2014 until early Autumn at the earliest.  Best to file an extension.

I would suggest also reading the California instructions as it sounds as if you will meet the California tests to claim part-year residence since you won't be there again for enough days.

A few thoughts .... we don't know if you have employment income to report, but if you do and you want to claim the foreign earned income exclusion you would be filing about 9 month too early.  

The same 330 day test is relevant for new Form 8965 that you'll have to file for 2013, but the instructions are unclear if you'd also have to wait to qualify before filing Form 8965 as one has always done with Form 2555.  It appears likely that you simply can't file the Form 8965 for 2014 claiming exemption code C until you have met the physical presence test, so you can't file at all for 2014 until early Autumn at the earliest.  Best to file an extension.

I would suggest also reading the California instructions as it sounds as if you will meet the California tests to claim part-year residence since you won't be there again for enough days.

As she's on a fiance visa I assumed that she's basically just visiting the UK for the 3 months in 2014 and that the OP cannot work. I also assumed that she had US health insurance in 2014. A problem might occur for 2015 if she was required to sign up again in the open enrollment window and didn't do that. She won't qualify for UK health insurance/NHS on her present visa and so might have a gap in coverage for the first 3 months of the year.....and that might be longer depending on what happens with her spousal visa.

Just a question Becca, have you investigated how you go from a fiance to a spousal visa and the income requirements.

As she's on a fiance visa I assumed that she's basically just visiting the UK for the 3 months in 2014 and that the OP cannot work. I also assumed that she had US health insurance in 2014. A problem might occur for 2015 if she was required to sign up again in the open enrollment window and didn't do that. She won't qualify for UK health insurance/NHS on her present visa and so might have a gap in coverage for the first 3 months of the year.....and that might be longer depending on what happens with her spousal visa.

Just a question Becca, have you investigated how you go from a fiance to a spousal visa and the income requirements.

Thank you guya and nun for making sure I'm not overlooking anything important.  As for your comments/questions...

My taxes for 2013 were filed as married filing jointly with my ex-husband, as our divorce wasn't final until April 2014.

I don't have any employment income for 2014 as I am semi-retired.  I may do some part time work in the future, but not until I'm here on a spouse visa and fully allowed to do so.  I do have medical insurance that covers me until my fiance and I marry and my present visa allows me to use the NHS since I returned on Oct. 1, 2014.

Earlier in 2014 I was here on a visitor's visa (Jan to July) and used my private medical insurance for health care.

As for my going from a fiance to spouse visa, I understand the financial requirements are the same for both and the spouse visa application essentially requires the same documentation (updated) with the addition of a marriage license.  I understand the application is for a FLR(M) and must be filed before my fiance visa expires, which should not present any problem (although it's coming up amazingly fast!  ). 

Is that what you meant?

Yes that's what I meant. Looks like you have thought carefully about everything. Just realize that you are require to file US taxes unless you are below the income threshold and it might be to your advantage to continue to file even though you are below the income threshold. So even if your income was low in 2014 a 1040 might be warranted.

Next you need to look at whether you'll do your taxes MFS or MFJ....the latter will open up you spouses finances to US taxation and can cause great complications.

Yes that's what I meant. Looks like you have thought carefully about everything. Just realize that you are require to file US taxes unless you are below the income threshold and it might be to your advantage to continue to file even though you are below the income threshold. So even if your income was low in 2014 a 1040 might be warranted.

Next you need to look at whether you'll do your taxes MFS or MFJ....the latter will open up you spouses finances to US taxation and can cause great complications.

It's good to know I've got things mostly under control, thanks! 

To be honest, despite evidence to the contrary, my main goal at this stage of life is to avoid as many complications as possible.  There are far too many unavoidable complications in this process already!  It's not that I want to spend money unnecessarily, but peace of mind is valuable to both of us.  So I'll most likely stick to MFS, unless circumstances or laws change drastically. I had planned to file a 2014 1040, and each year after, mainly because if I don't file habitually I'm too likely to mess up and miss it when I should file - if that makes sense.

Looks like you have things well in hand.

Your 2014 filing should be pretty simple. For 2015 and beyond you will have to deal with both US and UK taxes. You should look into how you'll pay the tax on your pension and those dividends and interest, that's where even seemingly simple circumstances can get a bit complicated. For now you should get your finances arrange for the move to the UK. Owning mutual funds outside of retirement accounts can cause US and UK tax complications.....so where do your dividends come from?

IMHO, I would use your UK address for filing both the 1040 and the CA part year resident returns for 2014. Not to do so might imply that you are not resident in the UK, which you now are, since a fiance visa is the first step to settlement.

You are entitled to use the NHS, which I believe negates any requirement to have insurance in the US under the ACA for 2015, and as you stated, you were covered in 2014.

If you have little/no income in future, MFS is typically the best filing status. There's no reason to expose your (future) spouse's income to US tax if your liability is nil, which it likely will be.

Owning mutual funds outside of retirement accounts can cause US and UK tax complications.....so where do your dividends come from?

I'll have to check on that, since my non-retirement accounts are either in Capital One 360 current accounts (for visa purposes) or E*Trade.  The E*Trade accounts came straight over through my divorce and I've just recently (and finally!) gotten them in my name and the ability to access them.  (It's been a long and rather frustrating process, as I'm sure many have experienced going through a financial separation after a long marriage....)

IMHO, I would use your UK address for filing both the 1040 and the CA part year resident returns for 2014. Not to do so might imply that you are not resident in the UK, which you now are, since a fiance visa is the first step to settlement.

I'm beginning to think that would be best too.  I thought by using the CA address I'd avoid having to do any UK tax filing for the 3 months I was here as a resident in 2014, but it doesn't look like that is really an issue until 2015 (I think?).  Anyway, it's usually best to just tell it like it is.

I agree as well that you should use your actual UK address.

California is one of the worst states for expats, and unless you plan on moving back to CA sometime soon, move yourself from that state as soon as possible. 2014 will undoubtedly require the state filing as you were living there for a portion of it, but if you file things correctly and limit the ties you have to CA, hopefully you can keep yourself from having to file a California return year after year.

This article will help you determine if you will still be considered a California resident even after claiming a UK address:

http://www.greenbacktaxservices.com/blog/expat-tax-ca-state-taxes/

Good luck!

I agree as well that you should use your actual UK address.

California is one of the worst states for expats, and unless you plan on moving back to CA sometime soon, move yourself from that state as soon as possible. 2014 will undoubtedly require the state filing as you were living there for a portion of it, but if you file things correctly and limit the ties you have to CA, hopefully you can keep yourself from having to file a California return year after year.

This article will help you determine if you will still be considered a California resident even after claiming a UK address:

http://www.greenbacktaxservices.com/blog/expat-tax-ca-state-taxes/

Good luck!

Having a previous residence and family in CA is a negative when trying to prove you are no longer resident, but applying for a UK spousal visa and marrying a UK resident are in your favor. Of course my choosing to change your domicile from CA to UK you'll avoid CA state tax, but open yourself up to UK tax on your world wide income.

Another little quirk is that the UK and US tax years are not aligned. US is the calendar year, but the UK's goes from April 6th to April 5th, so I think you'll meet the residence test for the UK in 2014-2015 just on number of days in the country.

If your Capital One account is just a bank or savings account with cash in it there are no problems.....other than if its in CA keeping it would be a CA domicile indicator.

The E*Trade account could be more problematic. If it has mutual funds in it you should take some action so you don't run into HMRC reporting funds rules. The UK taxes non-UK mutual funds at income tax rates and requires extra tax filings. Unfortunately the IRS has similar rules about a US citizen owning UK mutual funds......so as US citizen never buy UK mutual funds and as a UK resident make sure you mutual funds are HMRC reporting. US Vanguard ETFs are UK reporting and are obviously ok with the IRS so I would encourage you to move any US mutual funds in the E*Trade account into US Vanguard ETFs....you'll be able to buy those through E*Trade. Check with E*Trade if they have any problem with non-US residents trading.

You don't have to worry about any retirement accounts you have like 401b or 457 etc because they are protected by the Tax Treaty and you juts pay income tax on them to the UK and then take a foreign tax credit on you US taxes.

Wow! Very helpful information, thank you both!  I'll get on my investment portfolio contents right away and make sure I don't have any non-retirement mutual funds.

I figured I was pretty much stuck with the California residency thing, and I'm very aware it is one of the worst states when it comes to tax issues.  I've lived there a very long time and have all my family connections there. Back in the dark ages (last century!) I was a CPA and prepared taxes in California for several years. We would joke that if California could figure out a way to collect it, they would levy a tax on people flying over the state.  Gallows humor... every profession has their version.