2nd Year in the US - IRS Form
 

Hi,

Does anyone know the best way to file a tax return in the US by an Ex Pat in their second year?

The first one we filed was prepared by Ernst & Young (paid for by my husbands employer). But now we have to do our own. Is this possible? It all looks very complicated and appears that the US still uses gobbledegook tax jargon.

Can anyone reccommend a good accountant who could ovesee our return? We really want to get all that we are entitled to for being Ex Pats. We still own a house in London with a huge mortgage and pay council tax there too. Here, we currently rent a house.

Any advice would be greatly appreciated - there are so many knowledgeable people on this site, it's a great resource.

Many Thanks - Joyce

Re: 2nd Year in the US - IRS Form
 

Finding an accountant who is familiar with all the overseas deductions can cost a bit more than your standard accountant. What you might want to consider is buying a $30 program like Tax Cut pro (Staples, Best Buy, Walmart, etc) and preparing your taxes there. It is really simple to use -- you just put stuff in the boxes and the questions are in 'English' ;) rather than 'Tax Language' by and large.

Once you have your form prepared, you could take it to an accountant for a once over and save a lot of money. 1 hour of a quick review instead of 5 hours their preparing your filing.

I've used the software to get credit for taxes I've spent in Hong Kong vs. my US tax filing, so there is some stuff in there for foreign tax credits. Extremely technical filings might need a little more work, but by and large, the programs are pretty good for doing most of the heavy work of the filing.

Re: 2nd Year in the US - IRS Form
 

There are quite a few threads you could search for to see what people have said.

Depends on where you live, HR Block might be alright, but for many, there muppets...but there are plenty of others, a local one might be good to work with, but make sure they have a clue about UK taxes and how best to get what your entitled to...though if you have the details from your first year, you could do it yourself...the forms aren't that complicated once you know what your entitled to, just read the info provided with the tax forms.

Re: 2nd Year in the US - IRS Form
 

Hi Joyce,
I've been here almost 5 years and have used online software from TaxAct for the last few years to file US Federal and State returns. The package is super user friendly, works the way all software should, lets you dip in/out to resume from where you last left off, has helpful Help tuition, and costs just $16 p.a. if you want to e-file your returns.

Downsides? None with TaxAct software itself. The only problem I have had is that I am unable to e-file each year because I obviously can't get a US W2 (equiv. of UK P2 annual statement) for my UK pension income, which means I have to submit returns via regular snail mail.

Although the IRS Federal returns (and TaxAct) happily take into account UK income already taxed in the UK, the state of Oregon where I live does not and RE-taxes income earned in other US states or anywhere else in the world. After that unpleasant shock my first US tax year, I chose to back out of the UK tax system altogether because I no longer have property or other income there. Sounds like you may not have that option as a UK property owner, but then your US state may be more tax friendly than Oregon is.
Mike

Re: 2nd Year in the US - IRS Form
 

Oh look, let's all welcome the new Spammer, and do business with him because he uses such great marketing.

Hi Spammer. Welcome to the site!

Re: 2nd Year in the US - IRS Form
 

What a rude reply! I am amazed that an open forum such as this thinks that a new contributor who istrying to help should be "welcomed" in this way.

The question asked is quite reasonable. However:
1. A new arrival in the US can choose/elect to file in MANY different ways, (including married filing separate/joint under IR Code section 6013(g) /full-year under IR Code section 7701(b)). In practice Ernst & Young may not have chosen the method that saves the most tax, but the method that took them the least amount of time so they could get paid.

2. In the second year an individual could still claim mortgage interest without being subjected to the Passive Activity Loss Rules. This frequently saves tax.

In fact we are qualified in both the UK and US in tax. I do not think that a forum such as this is good if it hurls abuse at people such as us who are offering to help out...

Re: 2nd Year in the US - IRS Form
 

So, please clarify. Are you offering your tax preparation services for free?

If you are not, then I believe the site owners will have something to say about you spamming the site with commercial solicitations, whether or not they are on-topic.

It's not abuse, mate, I'm just pointing out that you are spamming. Spam isn't a difficult concept to grasp - unsolicited advertising of any sort via email or on a board like this is spam. The moderators delete spam, and I would expect that they will delete your messages.

But if I've been rude to an employee of a company that spams, well that pretty much makes my weekend. Cheers!

Re: 2nd Year in the US - IRS Form
 

I wouldn't categorise dbj1000 comments to you as 'abuse' he was pointing out that we don't allow people to use this site for free promotion of their business or services. Something that you would have been aware of if you had taken the time to read the Site Rules before posting.

Re: 2nd Year in the US - IRS Form
 

This will be my second year of preparing our tax return by myself (without the aid of an accountant), and I will be using TaxAct again - I can honestly recommend it.

I tried to use H&R Block online first of all, and it was a horrible experience. I would go out of my way to discourage people from using them. I had couple of problems I needed help with, so I used their online 'live agent' feature which connected me to someone who, I assume, was in a foreign country. The person had a very low understanding of the English language, and kept asking me the same question over and over again. His only way of helping me was telling me to restart my browser. In the end I had to lose all the work I had done, and start again with TaxAct, which worked flawlessly, and easily.

I still have the transcript of that conversation with the H&R Block person if anyone wants to see it :) It really was something else.

You gotta love tax season...

Re: 2nd Year in the US - IRS Form
 

Thanks so much...we will try TaxAct and give it a go. We have no income in the UK. My grown up daughters and some Nephews rent our house in the UK, so the mortgage is covered, but we still have to pay Council Tax there. As far as we know, the Mortgage Interest and Council Tax are the only benefits that we can claim for in the US. I wonder what would happen if we bought a house in the US though - which we are planning to do hopefully later this year??? I guess that might be another thread...

Cheers again for all advice received - I knew this site wouldn't let me down!!

Re: 2nd Year in the US - IRS Form
 

Whoa! You have rental income in the UK that needs to be reported, along with claims for mortgage interest.

Council tax is the tennts liability so you wouldn't be paying it because you have no liability. That is why the IRS say it is not a deductible real estate tax!

Re: 2nd Year in the US - IRS Form
 

Nice to have a tax professional back on the boards. I do hope you're offering your services for free, and not soliciting business by private message.

Re: 2nd Year in the US - IRS Form
 

No profit is made from the house - infact the opposite - we are down by about 300 gbp a month because I want my daughters to have a decent home that they can live in, while we are in America. We pay the Council Tax aswell and other utilities. Luckily we have a slush fund that will see us through for a while...why are you so quick to stamp on me??? Do you work for the IRS or Inland Revenue????????

Re: 2nd Year in the US - IRS Form
 

Well you might be making a loss, but if what your being paid equals a certain sum, it still needs to be declared because it is "income" but I can't remember the threshold and don't know it's the $80K that's the tax agreement...but it's whatever the minimal amount is before you have to file taxes...

Re: 2nd Year in the US - IRS Form
 

No, but I'm pretty sure he would like you to use a tax professional to prepare your taxes, and I suspect that he can probably recommend one.

Any chance the Moderators can do an IP check on "guya"? I suspect he may share an address with "AmericanTaxSolutions".