tom169

The main difference is that your tax residency (and therefore reporting requirements) would begin January 1st rather than day you arrived if you elected to be resident the entire year.

You can then married file jointly and likely get tax benefits of being married.

You'll need to report all worldwide income starting whichever you elect.

PBRlad

Flowchart - Taxation of Pension Distributions Under UK - US Income Tax Treaty - International Tax Blog

From the chart/site above above does a employer based pension still get mentioned on a FBAR even though US taxes won't be paid on it

durham_lad

FBAR has nothing to do with taxation, it only applies to financial accounts that you have signatory authority over. e.g. If you have a DC pension plan in the UK there will be no taxation in the US during the accumulation years but since you have signature authority over the investments then the maximum value of the plan should be reported on an FBAR if the aggregate value of all accounts is over $10k.

PBRlad

Thanks for responding Durham lad, my employer based pension plan has a small amount about £500-600 does this still get reported on a FBAR. In understand that any foreign bank account with $10k does.

durham_lad

With FBAR you have to calculate the maximum value in £s each account has during the year, then convert those figures to $s using the Treasury rate published for December 31st of that year. If the sum of those figures exceeds $10k then ALL accounts no matter how small have to be reported. For me and my wife we each have individual accounts in England that exceed $10k using those rules. We have a joint checking account that never exceeds $10k but we both have to file an FBAR report and in the section for joint accounts we both have to report our checking account.

durham_lad

When you file your first FBAR (it is done online) I recommend choosing to save a local pdf copy. This makes following years very easy indeed as it becomes a simple copy and paste of relevant account details with the new maximum values entered.

PBRlad

Thanks durhamlad I knew the fbar is associated with bank accounts and knew that at one point in 2017 my account was just a little over $10k so I will do a FBAR for my bank account.

I just want to confirm that the FBAR is also where you list pension plans? If my total pot is below $10k for that specific pension account do you not list it?

I apologise if I'm confusing things

durham_lad

Yes, if you have to file an FBAR you do list the value of your pension plan no matter how small it is.

jammiie

I'm in a similar position to PBRlad having arrived in June 2017 and wanting to file as Married Jointly to take advantage of the benefits.

I'm in the process of declaring my foreign income on TurboTax from Jan-May, am I right in saying that as this was all taxed as usual in the UK that I definitely won't owe any US income tax on it too?

PBRlad

Is there a way in Turbo Tax online to view the progress you have made in form format prior to submission?

Krysalgir

We're in pretty much the same situation.
For what I understand you'll need to ask for a delayed tax return (ie do it in October), to receive your tax doc from HMRC, and with it ask not to pay taxes on your UK income.

jammiie

That’s the first time I’ve heard of that approach.

I don’t see what extra information I’ll have by October that I don’t already have access to that would mean I have to delay my return until then.

Can you elaborate if possible?

durham_lad

I would hope so. I download TurboTax onto my PC and switching back and forth between the “step by step” and forms view is very easy indeed.

durham_lad

Not sure when in June you arrived but it may be worth requesting an extension so that you have been out of the US for 330 days otherwise you won’t be able to do an FEIE of UK earnings and you will be subject to the tax penalty for not having an ACA compliant health insurance policy for the whole of 2017.

I am working with my son on this as he arrived in England in September and started work shortly afterwards. He has his US tax documents now so I entered all the info into TurboTax to see that he doesn’t owe anything and went through the FEIE and health insurance forms to confirm that he needs to file after August 28 otherwise he will get dinged pretty hard. TurboTax also will print out the extension document to be mailed in.

jammiie

Do you mean “out of the UK for 330 days?”