US tax return questions

Old Aug 8th 2002, 2:34 pm
  #1  
Hilary
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Default US tax return questions

Okay, I've lived in the UK all my life and only found out recently I'm supposed to
file tax returns. (My US mother didn't know this either!)

I've got the basic form, but it appears a variant of the 1040 is also needed. As I'm
filing for myself only, and won't need to pay any tax (travel agents aren't that well
paid :-) - which one do I use? Does anyone know?

Do I need to list everything on the form? Wages, taxes paid, credits, refunds,
grants, etc.? What's a W-2? Am I supposed to have one?

The first part was straightforward, but now I'm just getting confused!

TIA

--
Hilary
 
Old Aug 8th 2002, 3:11 pm
  #2  
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Default

Do read the FAQ page of the London IRS. http://www.usembassy.org.uk/irs/irsfaq.htm

Here's what is relevent to you now:


Q. I am a U.S. citizen who moved to the U.K. several (or many) years ago and thought I did not have to file U.S. tax returns any longer. Now I have learned that information was incorrect. What do I do?

A. This is a common misunderstanding among Americans abroad, and should not create anxiety for those who find themselves in this situation. Generally, you should file returns for the past three years, taking the foreign earned income exclusion, the foreign tax credit, or both. It would be extremely unlikely that there would be any late penalties assessed, since penalties are computed as a percentage of tax owed, and only the rare taxpayer would actually owe tax in this situation.

Q. My British employer did not give me a Form W-2. Is that a problem?

A. Not at all. W-2s are used primarily to verify Federal Income Tax Withheld from wages, which is not done by British employers. Therefore, it is not necessary to attach any wage statement other than Form W-2 to your U.S. tax return

---
You should be able to use form 1040 or 1040EZ, along with the form for foreign-earned income exclusion, form 2555 or 2555EZ. The foreign-earned income exclusion lets you subtract what you have earned in the UK off your total earnings - magically resulting in zero earnings (and therefore zero tax).

W2 is a statement of wages earned, and tax paid. You don't have one of these, but you should make up a summary of what you have earned. You don't need to attach any official statements issued by your employer or the Inland Revenue - just list your earnings (or your best attempt at estimating them) on a blank piece of paper. Refer to this sheet when you are asked about W2s in the main return.

You don't need to worry about the taxes you have paid in the UK unless your salary is over about £60,000. Just focus on your gross earnings.
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Old Aug 8th 2002, 4:48 pm
  #3  
Hilary
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Default Re: US tax return questions

    > Do read the FAQ page of the London IRS. http://www.usembassy.org.uk/irs/irsfaq.htm

I found the FAQ, but it wasn't as helpful as it initially looked.

    > S. My British employer did not give me a Form W-2. Is that a problem?
    >=20
    > T. Not at all. W-2s are used primarily to verify Federal Income Tax Withheld from
    > wages, which is not done by British employers. Therefore, it is not necessary
    > to attach any wage statement other than Form W-2 to your U.S. tax return

Ah, missed that bit!

    > You should be able to use form 1040 or 1040EZ, along with the form for
    > foreign-earned income exclusion, form 2555 or 2555EZ. The foreign-earned income
    > exclusion lets you subtract what you have earned in the UK off your total earnings
    > - magically resulting in zero earnings (and therefore zero tax).

Does it matter whether I use 1040 or 1040EZ? I've got 2555EZ.

    > W2 is a statement of wages earned, and tax paid. You don't have one of these, but
    > you should make up a summary of what you have earned. You don't need to attach any
    > official statements issued by your employer or the Inland Revenue - just list your
    > earnings (or your best attempt at estimating them) on a blank piece of paper.
    > Refer to this sheet when you are asked about W2s in the main return.
    >=20
    > You don't need to worry about the taxes you have paid in the UK unless your salary
    > is over about =A360,000. Just focus on your gross earnings.

That's good - salary is unfortunately nowhere near that! Makes it easier.

Thanks. --=20 Hilary
 

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