jmood

Is Turbotax comprehensive in covering these care credit scenarios?

Michael

Yes, it is under "Deductions and Credits->You and Your Family->Child and Dependent Care". If you chose "Guide Me", Turbo Tax will walk you through all the deductions and credit asking questions for all deductions and credits.

If you chose, "I'll Explore on My Own", it will display a screen similar to the following where you choose which deductions and/or credits you want to work on and then Turbo Tax will only ask about those specific deductions and/or credits.

Since Turbo Tax has all the IRS forms needed for a 1040 tax filing, you can also fill in any form manually or manually make changes to a form that Turbo Tax created and it will use those forms to calculate your taxes.

jmood

Thank you Michael.

Steve_

Anyone moving to the US should read: http://www.irs.gov/pub/irs-pdf/p519.pdf

Especially the bit on dual-status returns, which TurboTax cannot complete and you are required to file for your first return (unless you became resident on January 1st). Or you can make an election to be resident for the whole year, which is a bad idea if you had reportable income for the period of the year before you arrived (because technically it becomes subject to US taxes).

There are examples of how to do dual-status returns in the 2011 and earlier editions of 519. In most cases it is essentially a pro-rated tax return for the portion of the year you were in the US.

The thing that usually trips people up in understanding US taxes is FICA, the US has really high payroll taxes (compared to Canada at any rate). So looking at the income tax rate isn't the whole story, FICA is 7.65% and the employer has to pay the other half, so if you're self-employed it's 15.3%. Social security (the main component of FICA) tops out at $117,000 of income.

As for exemptions from FICA, there are some for intracompany transferees under the relevant social security agreement, for up to 5 years. Students are also exempt for up to 5 years from FICA and also non US-source income (so they don't get taxed on money sent to them from abroad) and I think certain people in academia are exempt for up to 2 years - but in all cases you have to file the right paperwork. Usually a notation on your W-4 to begin with. Most of this is covered in 519.

expatray

Can anyone help me with this one. Its about Capital Gains Tax
I've been a Permanent Resident in the US for 6 years
I continued to work (albeit part-time) for most of that time in UK and paid UK tax, (also filing a US tax return declaring my income)
I have finally sold my UK property this year

Will my UK property be subject to CGT in US?

Pulaski

Yes, because it hasn't been your residence for two of the past five years.

Worse, your gain has to be calculated using the $/£ exchange rates at the time of purchase and sale, so you may have also made additional taxable gain because of movements in the exchange rate.

Owen778

I agree about reading 519. However, it's important to point out two things about electing to be treated as resident:
1. While it does mean your foreign income from before you move to the US is included on your US tax return, if there is a dual-taxation treaty, you can also get credit for your foreign taxes paid on that income. Sometimes that means that the election is a good choice.
2. The election is only available under certain conditions, basically if you're married to a US citizen or resident alien.

Michael

That's automatic and just part of form 1116. Tax treaties are for special tax situations such as which county taxes pensions.

expatray

So, even though (under UK rules) I've spent more time in UK (working) and therefore will treat me as 'Resident' there, so would be liable to UK CGT, I will still pay US CGT as well??

Pulaski

You won't pay both, that's for sure, but as a permanent resident you're liable for taxes in the US. ..... You are in a very murky and nuanced area, so I would strongly recommend professional advice from a tax accountant familiar with US and UK taxes.

expatray

Thanks for the info.....and (of course) that's where part of the problem lies
Trying to find someone who has had experience with both countries tax laws!!

Pulaski

The advice will cost you, but the sums involved are presumably relatively substantial. You would probably be best served by a "mid-tier" firm of Chartered Accountants, one that has international clients and associated offices. I am sure that the largest firms would all help you too, but they'd probably charge a good bit more.

augigi

Agreed - I still haven't found a good one who knows the US/Australia tax stuff. It's a giant PITA every year.