Another one of those tax threads
 

Hello all,

I need some help with my taxes. I am going to get H&R to do my taxes but I do want to understand taxes here.

Background
-My wife and I moved up here in June 2010 from Sydney, Australia.
-From June 2010 I have my W2 here.
-Australia tax here is July to June so I will be filing my taxes for 2010 (Jul 2009 to May 2010) in Australia

Questions
-I understand I will be a resident of CA for tax purposes for the year 2010. Am I correct in saying that I do not need to declare my AUS income that I earned prior to moving here i.e. up to May 2010

-Which publication should I read up to get an understand around the relocation expenses. I hear they are deductible against my W2 income here as I have paid significant amount of money (logistics, insurance, flights etc.)
Would that be publication 521? Could I confirm that the moving expenses are not included in the standard deduction I would claim (married filing jointly) i.e. the moving expenses are deducted from my gross income to arrive at the taxable income?

-I own a property in Sydney which I rented out when I moved up here. My mortgage there is > the rental income. As I understand, can I claim the loss against my W2 income here? Could you guide me on which publication should I read up? Is it 527?

Thank you in advance. If you could share any information you have from your experience, will save me some time reading up the two publications.

Cheers,

Re: Another one of those tax threads
 

Good luck with that, hope they don't make a mess of it...

As for deductions, there's a list of deductions if the relocation was because of a job, but it is quite limited such as not including hotel stay or car rental.

Re: Another one of those tax threads
 

Yeh, if there's one year where it pays to get some competent tax advice - if one's employer won't stump for it - it's a split first year in the US. The trouble with H&R Block and their ilk is that they typically have little or no idea about situations like this.

Re: Another one of those tax threads
 

Actually thats exactly what he said. The impression I got was, they do not specialize in overseas taxes. He wanted me to read up and do as much research so that I would be 'one step ahead' of them. So i asked them if they are going to help me and he wrote down a senior tax agent's name and asked me to call back to make an appointment. It's not looking good.

Anyone have any tax agent I could get in touch with. Any referrals?

Let me know if you have any other suggestions on my original post. Thanks!

Re: Another one of those tax threads
 

Thanks Bob. I came on a E-3 so not a job transfer but I guess the E3 qualifies as 'relocation coz of job'. I am looking to claim just my relocation costs and air fare and stuff like that coz my W2 includes small bonus the company gave me to help me with relocation.

Re: Another one of those tax threads
 

H&R Block will probably be worse than useless.

You might as well just buy a copy of TurboTax and try doing the return yourself if you can't find an accountant who actually understands the issues involved.

You can easily do a "worst case" tax calculation (just assuming the standard deduction) to see if you might owe any tax, file for an extension (and pay any tax that you might owe) and take another 6 months to figure out the return for yourself.

Re: Another one of those tax threads
 

Peter Newton, a BE member has helped quite a lot of people, he's based in NY though, but Federal is Federal, and he might be able to refer you to someone local if that's what you prefer.

Re: Another one of those tax threads
 

I plugged in my earnings in turbo tax and definitely getting a refund. I didn't include my Australia rental property and relocation expenses so the refund will only get bigger I guess.

Quick question, do I have to pay a few to get an extension? How do I go about it?

Re: Another one of those tax threads
 

Thank you. I will PM him.

Re: Another one of those tax threads
 

No fee. It is only an extension of time to file the return - you still have to pay any tax that might be due by the normal filing date but since in your case it looks like you will be getting a refund that is not an issue.

The instructions can be found here on the IRS web site and the form is here.

It's about the simplest and shortest form that the IRS has - you don't even have to sign it!

California has streamlined the process even further - you get an automatic 6 month extension simply by not filing a return by the normal filing date - in other words you don't have to do anything :)

Re: Another one of those tax threads
 

What's the deal with h and r?

I have used them every year since moving here. (5 years) I always find them to be ok. But we have simple returns.......

Re: Another one of those tax threads
 

So let me get this right - Do I have to file for Federal AND State extension? Or is it just one? The reason I ask is, you point me to the source on IRS re extension (thank you for that btw!) and also mention the CA automatic extension. Just wanted to be sure.

Re: Another one of those tax threads
 

That is the deal with them - they are OK for doing simple straightforward returns, but those are the kinds of return that most people can do by themselves with TurboTax.

They don't have the knowledge necessary to advise someone in the OP's situation and he would, therefore, (in my opinion) be better off either hiring a CPA who understands the issues involved or taking the time to figure it out for himself.

Re: Another one of those tax threads
 

You have to apply for the Federal extension.

You do not have to apply for the CA extension - it just happens automatically when you don't file a CA tax return in April.

Re: Another one of those tax threads
 

Appreciated.

I want to use a CPA this time around. I have sent a note to Peter and may also ask for referrals if he is not able to assist me.

Regards,