AnnieBelle

Hi there,

So this is the first time I have had to file taxes and I am not really sure where to start and could really use some help and advice. My husband (USC) and myself (UKC) moved to California from the UK in September last year. I managed to get a job quite quickly and started working in October where as my husband didn't start working until January this year. I have received my W2 but I am not really sure how I should file if we didn't spend the whole tax year living in the US and therefore we're working in the UK before September and my husband didn't work at all in the US last year. I read something about dual status but I don't really understand. I would really appreciate it if someone could explain to me how to go about filing.

Thank you!!!

md95065

As a US citizen your husband needs to file a return for last year that reports his entire worldwide income.

You also need to decide whether you want to file a single return as "married filing jointly" or each file separate returns as "married filing separately".

In this case I suspect (but am not sure) that you may be better of filing separately. If your US income was below the filing threshold then you don't *need* to file a return but, since you worked and had tax withheld, you will want to file one because that is the only way of getting back at least some of the tax that you paid

Jscl

As a US citizen, your husband should have been filing every year he had income above the threshhold, even when he lived in the UK.

Assuming your husband earned income while in the UK and is going to have to work out how to have his UK income taxed anyway, it might be worth filing jointly and having the benefits of joint filing, even though it would include all of your worldwide income too. This page might help:
http://www.irs.gov/Individuals/Inter...t-Alien-Spouse

Pulaski

Not sure what you mean by "have his UK income taxed", but between the exemption of $90-some thousand of income and that foreign tax paid is credited for US tax purposes, it is extremely unlikely he will have to pay any tax in the US on income he earned while living in the UK.

Jscl

I meant as he is a US citizen he will have to deal with the situation of having his UK income (salary, savings, etc.) converted to US$ and put onto a US income tax form, and that's the thing that most people find daunting in split years. As they have to do that for the husband, including the wife's (OP's) worldwide income on the tax return as well isn't such a mental barrier and might actually prove worthwhile financially for them.

Can you use the exclusion if you are resident in the US for part of the tax year? I didn't think you could. They can still use tax credits or an itemised deduction so that they are not double taxed.

AnnieBelle

Thank you for your help. So my husband has been filing his taxes while he was in the UK. So does he literally just do the same but obviously with a US address now? Ans so if we file separately do I not need to claim what I earned in the UK?

JAJ

Same - except that if you're living in California, he also needs to file a CA tax return. As should you. Even if your income was below the filing threshold, you should always file a tax return for a number of reasons, including:

- establishing your income for other Federal/State purposes;
- ensuring that the statute of limitations takes effect;
- if you intend to become a U.S. citizen, you need to be tax compliant (and it's much easier to demonstrate this if there is a return on file every year).
- reclaiming an excess of tax withheld. You may find you are due a tax refund.


You wouldn't need to include anything from the U.K. that was earned before you became a U.S. resident for tax purposes. That date is the day you arrived in the United States with your immigrant visa.

If you file separately, you need to take into account some of California's rules on how income is split between spouses, since it's a community property state. Also, dual status means that you are not U.S. resident the full year and this is more complex than a regular tax return.

An alternative is to file married/joint however you would then need to elect to include all your U.K./worldwide income and capital gains for the year and then take credits for U.K. tax. Head of household can sometimes work for those with a non-resident spouse, but that's unlikely to apply based on the facts given.

There's enough complexity in all this to suggest that you may wish to use a tax professional to work through all the scenarios and decide what is best. If you're not able to file by April 15, you need to file a form 4868 to get an automatic 6 month extension from the IRS. It looks like CA gives an automatic 6 month extension without needing an application: http://www.taxes.ca.gov/Income_Tax/extind.shtml

Don't forget FBAR report if you have more than $10,000 in non-U.S. bank accounts anytime during 2013 (same goes for your husband). Filing deadline is June 30.

Jscl

If you file jointly ("married filing jointly" (MFJ) status), both of you must include income from worldwide sources.

If he files separately ("married filing separately" (MFS) status) then he must include income from worldwide sources. But once he chooses MFS then you also have to file MFS if you file. And with MFS you must file if you earned more than $3900 in the US (in 2013) so it would depend on your income. (If you have to file you'd also need to decide whether filing non-resident or dual status works best for you, and that would be more complicated.)

AnnieBelle

What is FBAR? Do we have to do that even if we transferred it all to a US bank account?

JAJ

If you file married/separate as dual status, you have to include worldwide income from the point of being U.S. tax resident. You can only exclude non-U.S. income for the period of time as non-resident.

JAJ

http://www.irs.gov/Businesses/Small-...-Accounts-FBAR

You must file FBAR if you had over $10,000 in non-U.S. bank accounts anytime during 2013. Both of you must file separately, if liable to do so. Your husband should have been filing these reports already, probably.

It's filed separately from your tax return.

If you transfer everything to the U.S. before the end of 2013, you don't have to file for 2014 and subsequent years.

Also, pay attention to whether or not either of you need to add a form 8938 to your tax return. The filing threshold is higher than FBAR, so not as many people need to file this one.
http://www.irs.gov/uac/Form-8938,-St...nancial-Assets

Andipandi

Hi, I'm in a similar position, new off the boat and green carded since August 2013 and going to file separately from the American wife.

I liked the answer -
"You wouldn't need to include anything from the U.K. that was earned before you became a U.S. resident for tax purposes. That date is the day you arrived in the United States with your immigrant visa."

However my homework suggests I will have to fill out a 1040 for post August (resident alien status) and a 1040NR for pre-August (non-resident alien status).
I'm terrified of 1040NR page Sch NEC, where it appears all stock dividends are to be listed and will be taxed (I received a lot of dividends but paid tax for them in the UK). How do I tell Uncle Sam I already paid these?

Any takers on this one?

Much obliged in advance -
Andrew