mcjimbo

Hi all,

Well its that time of the year, and we've got to get our tax return in. I moved to the U.S. in June last year, and have worked since September.

This will be my first tax return ever in the U.S. and my both of our first as a married couple. With that in mind, can those of you who are a little better organized and got your tax returns in early under similar circumstances to us give us any advice, or anything we need to know?

We are going to HR Block, but i just want to make sure i take all the appropriate paperwork, and get the maximum amount back.

Thanks in advance

James

ian-mstm

Did you work in your home country during 2004? If so, I'll repeat what I've said elsewhere... H&R Block has no clue how to handle world income. Use them next year when all your income is US based. For this year, do it yourself. Include your world income as regular earnings, and later on deduct it out as already having been taxed.

Ian

SecretGarden

James, you can exclude up to $80,000 of income earned outside of the United States, but you still have to declare it and then exclude it.

Try the IRS website and do a search for tax tips for aliens. Gigantic .pdf file filled with everything you need to know. It should be relatively simple for you guys---no house, no kids yet right? Less deductions, but less to itemize as well.

And there's no guarantee that you're going to get anything back. It depends on your tax bracket and the amount you've had withheld from your checks.

~SecretGarden
~and Mr. Pink
(getting enough of a refund to get us some tickets to England this August!)

mcjimbo

Thanks SG, we are off to England in August to for a wedding, flights will be cheap... not looking forward to the exchange rate though

Bluegrass Lass

Where did you get these cheap flights?!?! Hubby and I want to return in Sept. for a 2 week trip to Glasgow and I can't find anything for less than $1k/person!! :-(

Anyways, SG gave ya some pretty good advice. And I concur with Ian, H&R Block will know jack shit about declaring world income. Go to a professional CPA or do it yourself.

SecretGarden

I saw American airlines, round trip to LHR, nonstop for $841 per person. That's the cheapest I've seen so far, down from about $960 a month or so ago.

Hi Jamie.

~SG

Noorah101

Hi James,

Sadegh and I did our very first tax return together last week. We went to my Tax Accountant that I've been going to for years. It was very very easy, far easier than I had anticipated. We filed married, joint, because the tax break was better.

A couple of tips:
1) We included the $115 we spent for the vaccination supplement, in our medical deductions. After all, it was a doctor visit!
2) We included the $175 EAD fee as a deductable and the tax accountant placed it in some category for Sadegh's self-employment business expenses. We'll do that again this year with the renewal fee.

As it turns out, we're getting just a tiny bit less of a refund than I was getting as a single person last year. How weird is that? We must have done something right all year!

The only difference I see with ours is that our tax guy made no mention of Sadegh working in Turkey from January to April of 2004. Sadegh paid no taxes in Turkey on his earnings, either. But the tax guy only included his income from April to December, here in the USA. Why, I don't know, but I figure he knows what he's doing....so I didn't ask.

Best Wishes and Happy Taxes!
Rene

Bluegrass Lass

Well, I'm going to have to spill a little tiny secret, and hope that the IRS isn't watching out there somewhere. I was not sure which form(s) to fill out in order to report Scott's earnings in the UK for the first 3 months of last year. <Not to mention that the UK tax year is different> I looked over several publications, and was using Turbo Tax which wasn't that great a help. Having exhausted all other avenues, I set up an appt. with one of the regional firms that usually does corporate taxes or taxes for wealthy individuals. So you'd think these guys would know their stuff.

Well, to make a long story short, the CPA felt the 2555 did not fit our situation because only a USC or alien that was already a Resident could use this form to report worldwide income, but he also wasn't 100% certain. So we ended up not reporting his UK income at all when we filed. The CPA said that even if we did end up getting audited, we wouldn't have to worry bout it cuz he paid more taxes on that income there, than he would have paid on that income here. I got tired of banging my head up against the wall, and trying to decipher tax jargon, and we needed our refund since I'm currently unemployed, so we went ahead and filed that way.

I know, I know. Some of you out there are probably aghast that I did that, but it wasn't that much income anyways (~$10k) and he paid almost 20% tax on it - way more than he would have paid here.

Hope it won't come back to bite us...

Btw, Rene, Scotty's flying into your neck of the woods tomorrow night. Hope the weather's going to be good. He's going to be in the Phoenix/Tuscon area for work for 2 days. I'm sooo jealous he gets to see that part of the US before I do, dang it!! Damn immigrants get to see more of the US than the natives! ;-)

mcjimbo

Thanks all for sharing your tax experiences with me, its given me great insight into preparing our own.

James

SecretGarden

Hi,
Yes, since Mr. P. is also self employed in addition to having a fulltime paid job during the day, we also were able to include the EAD fee as a self-employment business expense.

The deduction for the vaccination supplement will be dependent on several things---you are allowed to take a deduction for medical expenses not paid by insurance IF the total adds up to a certain percentage of your income. We thought we might be able to take some of this because of all the treatment and therapy after Mr. P's hand injury, but for us, it wasn't enough to make the cut off. Double edged sword there, I guess.

There is a section on the 1040 that asks if you have interest in or are a signatory on a foreign bank account. If you do, and you are, you have to include a brief form that asks for the institution, account number, and balance. Mr. P. kept his Lloyd's account open over there just for convenience sake, but it only has about nine pounds in it.

Our CPA also had us sign a statement declaring that we wanted Mr. P declared a resident alien for tax purposes. There have been people on the site who have done this, and people who haven't, but our guy felt it was a good idea, just to be thorough.

If anyone needs some details on how to declare alimony payments to an ex spouse in the UK, let me know and I'll answer by PM since it's not really applicable to James' situation.

James, the one bit of advice I'd give you is to go to someone at least for the first year. Our system over here is completely different than the UK system, and if Angie doesn't have experience in "married filing jointly", it might be wise to pay someone to teach you how to do it.

The other issue is that if you end up having to pay a balance (due to good income and not many deductions) then you might want to reconsider the amount of money you have withheld from your paycheck, and increase it. There are differing philosophies on this too---some people don't want the IRS to have any of their money during the year and don't mind writing out a check in April....some panic at the thought of owing a balance (that would be me!)

Hope this helps.
~SecretGarden

Rete

Please do things the legal way with IRS. There use to be a link on the FAQ about how to prepare the first year's taxes but I see that Steve removed it.

Note if you have income from the UK you do need to complete the 2555 and since you were not a PR in 2004, you might want to just include a very brief note that for the purposes of taxes you wish to be considered a resident for the 2004 tax year.

You put on the UK income and then later remove it before the taxes are calculated. Most tax preparers do not know how to do taxes involving foreign earned income. So you might have to educate them.

If anyone wants a good source they could do a search on google for Betastar at alt.visa.us.marriage-based ... she outlined the entire process beautifully.

Rete

SecretGarden

Just what I said. A few weeks back we talked about the link to the IRS section on tax information for aliens. Im at work now and not really supposed to be on the computer so no time to search. I'm sure James can find the file on his own---it's 60 pages or so on just the information he needs.

~SecretGarden

Rete

I got stuck with the phone and didn't see your post ;-) Hey two great minds what can I say.

Rete

SecretGarden

Damn job! It takes up all my posting time!

~SG

Noorah101

Ohhhhhh....I wish you could have come out, too!! I would have loved to meet you!! As far as I know, the weather should be good. It's been in the 70's and absolutely gorgeous here lately.

Sadegh's already been on road trips (for work) to San Francisco and Dallas without me! LOL I told him to save some place for ME to show him! hehehe. Something OT but funny...shortly after Sadegh got to the USA, never having been to the USA before but having heard about all these popular states and cities, he asked me "so....how far is it from California to San Francisco?" That's when I purchased a big map of the USA and had to explain which was a state and which was a city.

Rene