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movingtolakes Jan 31st 2019 9:03 am

Dual Tax return USA / UK 2018
 
Hi Everyone,

Some of the quotes i have had to have a professional do this are huge so i am going to attempt myself for the 2018 year, below is a summary of my situation its not overly complicated, and a few questions. I'd appreciate some tips if you think i have missed anything otherwise i will file with turbo tax as below.
  1. - Need to file USA taxes for 2018, i moved home to UK from USA in August 2018 and have since been earning pounds, prior to that i was in USA for 9 years, green card since 2015. I believe given i had the green card for less than 8 years i don't need to file the expatriation form is this accurate?
  2. - accountant told me i could file just a USA tax return and exclude my UK income for 2018 using form 2555-EZ - he said this is available in Turbo Tax. Do i file as a resident or non-resident given i left the country in August (I also filed I-407 to relinquish my green card in October 2018)?
  3. -Sold my house in July before i left - i believe no tax is owed on this as it would be below the threshold for capital gains - is this accurate?
  4. -Last few years i have always filed a 8938 and the FBAR for my foreign (UK) bank accounts as i was over the threshold. Do i need to do this for 2018 given i left, technically the accounts are not foreign now i live back in UK?
  5. -I think i only need to do the HMRC self assessment next year because i have only earned pounds from August - is this accurate?

Also - if anyone has a good recommendation for someone to do this for me and is reasonably priced i would go that route probably

Thank-you
Richard

theOAP Jan 31st 2019 3:25 pm

Re: Dual Tax return USA / UK 2018
 

Originally Posted by movingtolakes (Post 12630170)
- Need to file USA taxes for 2018, i moved home to UK from USA in August 2018 and have since been earning pounds, prior to that i was in USA for 9 years, green card since 2015. I believe given i had the green card for less than 8 years i don't need to file the expatriation form is this accurate?

The eight years are comprised of both full and partial years (6 full + 2 partial = 8 years), but in your case you only have 4 at most as a green card holder, so, correct, no 8854 needed.


Originally Posted by movingtolakes (Post 12630170)
- accountant told me i could file just a USA tax return and exclude my UK income for 2018 using form 2555-EZ - he said this is available in Turbo Tax. Do i file as a resident or non-resident given i left the country in August (I also filed I-407 to relinquish my green card in October 2018)?

I'm not suggesting the accountant is wrong (they are the professional, not me), but did they also explain to even contemplate this type of return you need at least 330 days of residence outside the US, or bona fide residence abroad for 1 complete calendar year, before you may file when using 2555.

IMO - your filing status for the year is determined by your status on December 31. On 31 Dec. you will be an NRA. Most would file a split year return for 2018 on an 1040NR return which includes an unsigned completed 1040 to cover Jan. to Aug.


Originally Posted by movingtolakes (Post 12630170)
Sold my house in July before i left - i believe no tax is owed on this as it would be below the threshold for capital gains - is this accurate?

If the total gain, after allowable deductions, is less than $250,000 if filing MFS or single, or $500,000 if filing MFJ, the gains would be exempt, provided you meet the requirements for the time you have lived in the property.


Originally Posted by movingtolakes (Post 12630170)
-Last few years i have always filed a 8938 and the FBAR for my foreign (UK) bank accounts as i was over the threshold. Do i need to do this for 2018 given i left, technically the accounts are not foreign now i live back in UK?

Nowhere in the IRS information will you find an answer to this (I could be wrong), but generally, to be safe, you file the 8938 with the 1040 unsigned return (part of the 1040NR) and the FBAR as normal. The accounts were foreign from Jan. to Aug.. Solves any worry about meeting the informational filing,..... and penalties.


Originally Posted by movingtolakes (Post 12630170)
-I think i only need to do the HMRC self assessment next year because i have only earned pounds from August - is this accurate?

In your circumstances, your 2018/19 would usually only include Aug. 2018 to 05 Apr. 2019, provided there was NO other income from abroad after Aug., but why not give HMRC a call to verify. They may suggest a notation somewhere (white space). They are usually very helpful.

movingtolakes Mar 1st 2019 9:44 am

Re: Dual Tax return USA / UK 2018
 

Originally Posted by theOAP (Post 12630369)
The eight years are comprised of both full and partial years (6 full + 2 partial = 8 years), but in your case you only have 4 at most as a green card holder, so, correct, no 8854 needed.


I'm not suggesting the accountant is wrong (they are the professional, not me), but did they also explain to even contemplate this type of return you need at least 330 days of residence outside the US, or bona fide residence abroad for 1 complete calendar year, before you may file when using 2555.

IMO - your filing status for the year is determined by your status on December 31. On 31 Dec. you will be an NRA. Most would file a split year return for 2018 on an 1040NR return which includes an unsigned completed 1040 to cover Jan. to Aug.


If the total gain, after allowable deductions, is less than $250,000 if filing MFS or single, or $500,000 if filing MFJ, the gains would be exempt, provided you meet the requirements for the time you have lived in the property.


Nowhere in the IRS information will you find an answer to this (I could be wrong), but generally, to be safe, you file the 8938 with the 1040 unsigned return (part of the 1040NR) and the FBAR as normal. The accounts were foreign from Jan. to Aug.. Solves any worry about meeting the informational filing,..... and penalties.


In your circumstances, your 2018/19 would usually only include Aug. 2018 to 05 Apr. 2019, provided there was NO other income from abroad after Aug., but why not give HMRC a call to verify. They may suggest a notation somewhere (white space). They are usually very helpful.

Cheers for all the detailed responses, very helpful

Hotscot Mar 1st 2019 2:29 pm

Re: Dual Tax return USA / UK 2018
 
Just curious.
Were you over the $10,000 FBAR limit while you still lived in the US in tax year 2018?
I'd file it anyway just to wrap up.

movingtolakes Mar 1st 2019 6:23 pm

Re: Dual Tax return USA / UK 2018
 

Originally Posted by Hotscot (Post 12646119)
Just curious.
Were you over the $10,000 FBAR limit while you still lived in the US in tax year 2018?
I'd file it anyway just to wrap up.

yes I was - good plan I’ll do that then wash my hands of the irs!

Robgdunn Mar 3rd 2019 10:31 am

Re: Dual Tax return USA / UK 2018
 
Hello Richard

FYI if of any use I am dual national (UK/USA) living in UK with US wife - we have gone through a lot of pain from poor US based CPA advice and sorting out dual tax returns and the problems of becoming a US national (me) with a lot of UK "income" baggage (ie dont get me started on when i found out about ISA's/Limited Company's/Shareholdings/........)

Anyway re recommendation we use the following (UK based) - https://www.usuktaxservices.co.uk/ (John Mooney) who have been absolutely fantastic is sorting out out affairs - I would say their price is reasonable and advice first class. No harm in giving them a call / feel free to mention my name (Robert Dunn) We would have been absolutely stuffed without their help..

Re other stuff sorry cant help you as I tend to stick my head on the sand between Jan-April for IRS/HMRC hoping that when I have finished with the "to do" list from the better half and all the forms have been submitted I have 9 months to recover :-)

Good luck

Rob

Hotscot Mar 3rd 2019 1:51 pm

Re: Dual Tax return USA / UK 2018
 
'with a lot of UK "income" baggage (ie dont get me started on when i found out about ISA's/Limited Company's/Shareholdings/........'

You got all that sorted then?

Did you have to shift your assets into cash and/or other, (perhaps US based), vehicles?

Robgdunn Mar 3rd 2019 5:52 pm

Re: Dual Tax return USA / UK 2018
 
Hi - Yes all sorted eventually thanks - We were allowed to re-submit our tax returns (IRS) as part of an amnesty - Also as I work in Financial Services (IT) I know a thing or two about the Financial Service Conduct Authority (FCSA) so went back to the Financial Advisors (St James Place) and gave them a choice - sort out 5 years of ISA and pay my Accountants (££) (for re-submission) and compensate me (£££) or I would report them for poor advice (I had declared) I was a dual citizen/US National) .
Re anything else I know double check anything in the UK (£) is (IRS) compliant.

Hotscot Mar 3rd 2019 6:06 pm

Re: Dual Tax return USA / UK 2018
 
But after three years you're outside audit risk anyway.
So why resubmit, amnesty or not?

Within three years you can amend routinely.

(Not questioning your reasoning, just adding to my body of knowledge.)

nclarke1899 Mar 5th 2019 12:07 pm

Re: Dual Tax return USA / UK 2018
 

Originally Posted by Robgdunn (Post 12647049)
Hello Richard

FYI if of any use I am dual national (UK/USA) living in UK with US wife - we have gone through a lot of pain from poor US based CPA advice and sorting out dual tax returns and the problems of becoming a US national (me) with a lot of UK "income" baggage (ie dont get me started on when i found out about ISA's/Limited Company's/Shareholdings/........)

Anyway re recommendation we use the following (UK based) - https://www.usuktaxservices.co.uk/ (John Mooney) who have been absolutely fantastic is sorting out out affairs - I would say their price is reasonable and advice first class. No harm in giving them a call / feel free to mention my name (Robert Dunn) We would have been absolutely stuffed without their help..

Re other stuff sorry cant help you as I tend to stick my head on the sand between Jan-April for IRS/HMRC hoping that when I have finished with the "to do" list from the better half and all the forms have been submitted I have 9 months to recover :-)

Good luck

Rob

Hi Rob,

I am also in a similar situation as yourself. Recently became a US citizen, but living back in the UK (Awaiting my wifes VISA to be accepted). I will look into the firm you have suggested, as I need to sort out my taxes for this year.

Appreciate the suggestion.


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