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My first US Tax return....

My first US Tax return....

Old Feb 9th 2009, 10:18 pm
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Default My first US Tax return....

so, a couple of basic questions, if I may :-)

I'm using TaxAct (the free version - I'm in TX, so no state tax) based on various recommendations on this forum. I've entered everything I can, and have the following questions....

1. It asks if I got the economic stimulus payment, and defaults to $600. I did not, as I didn't move here until May, so I've put $0, which in turn increases my refund by $600. Is this ok?

2. It's not asked me anywhere for my immigration status - did I miss something, or do I need one of the paid-for versions to get into that detail?

3. I have claimed my moving costs (company relocation) which I assume is OK.

4. Should I be entering foreign earnings (i.e. from the UK subsidiary for the period Jan - May) anywhere? I did see a section for foreign earnings, but it didn't seem relevant.

Thanks all, sorry for the noob questions...

I think that's all, for now.
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Old Feb 10th 2009, 1:50 am
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Default Re: My first US Tax return....

Originally Posted by pwhite8314
so, a couple of basic questions, if I may :-)

I'm using TaxAct (the free version - I'm in TX, so no state tax) based on various recommendations on this forum. I've entered everything I can, and have the following questions....

1. It asks if I got the economic stimulus payment, and defaults to $600. I did not, as I didn't move here until May, so I've put $0, which in turn increases my refund by $600. Is this ok?

2. It's not asked me anywhere for my immigration status - did I miss something, or do I need one of the paid-for versions to get into that detail?

3. I have claimed my moving costs (company relocation) which I assume is OK.

4. Should I be entering foreign earnings (i.e. from the UK subsidiary for the period Jan - May) anywhere? I did see a section for foreign earnings, but it didn't seem relevant.

Thanks all, sorry for the noob questions...

I think that's all, for now.
1. Yes. If you have a Social Security Number and were resident here for tax purposes last year then you can claim the stimulus payment.

2. The IRS don't care about your immigration status. They care about your tax status. If you meet the Substantial Presence Test then you're resident here for tax purposes and can file taxes like any other American. If you're not resident for tax purposes then things get more complicated, but I don't think that applies to you.

3. Are you clear on what you can and cannot deduct? Make sure you're not deducting anything that isn't covered here, or that your company paid for.

4. Yes, if you're resident here for tax purposes then you need to report your foreign earned income, just as if you were an American who worked in the UK from January 1st 2008 until the date you emigrated. Read about the Foreign Earned Income exclusion, which allows you to exclude up to $87,600 per year of foreign earned income if there is a tax treaty in place (which there is for Britain).

Good luck! You're brave doing your first year's tax return yourself - I didn't have the nerve, but it should be relatively straightforward if numbers and researching the IRS website don't worry you.

However, I think you're foolish (and excessively cheap) using the free version of TaxAct. This is likely to be your most complicated tax year ever, with the year split between Britain and the US as it is, and the very least you need is a good, detailed, comprehensive tax package. I don't know what versions of TaxAct are available, but with TurboTax you need the Deluxe version at the very least to get all your complications worked out.
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Old Feb 10th 2009, 2:16 pm
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Default Re: My first US Tax return....

Originally Posted by dbj1000
However, I think you're foolish (and excessively cheap) using the free version of TaxAct. This is likely to be your most complicated tax year ever, with the year split between Britain and the US as it is, and the very least you need is a good, detailed, comprehensive tax package. I don't know what versions of TaxAct are available, but with TurboTax you need the Deluxe version at the very least to get all your complications worked out.
I don't think there is anything dramatically different that would help in the other versions, unless they are itemizing perhaps. Especially if there is no state tax to file.

I have tried Turbotax and don't see anything it offers that is better then Taxact.
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Old Feb 10th 2009, 9:15 pm
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Default Re: My first US Tax return....

Originally Posted by dbj1000
1. Yes. If you have a Social Security Number and were resident here for tax purposes last year then you can claim the stimulus payment.

2. The IRS don't care about your immigration status. They care about your tax status. If you meet the Substantial Presence Test then you're resident here for tax purposes and can file taxes like any other American. If you're not resident for tax purposes then things get more complicated, but I don't think that applies to you.

3. Are you clear on what you can and cannot deduct? Make sure you're not deducting anything that isn't covered here, or that your company paid for.

4. Yes, if you're resident here for tax purposes then you need to report your foreign earned income, just as if you were an American who worked in the UK from January 1st 2008 until the date you emigrated. Read about the Foreign Earned Income exclusion, which allows you to exclude up to $87,600 per year of foreign earned income if there is a tax treaty in place (which there is for Britain).

Good luck! You're brave doing your first year's tax return yourself - I didn't have the nerve, but it should be relatively straightforward if numbers and researching the IRS website don't worry you.

However, I think you're foolish (and excessively cheap) using the free version of TaxAct. This is likely to be your most complicated tax year ever, with the year split between Britain and the US as it is, and the very least you need is a good, detailed, comprehensive tax package. I don't know what versions of TaxAct are available, but with TurboTax you need the Deluxe version at the very least to get all your complications worked out.
Excessively cheap? How dare you sir :-)

So far it seems relatively simple, it's my UK tax return for 2008 that I'm dreading. However, I hate this stuff, and you have a point, although if I'm going to pay for something it would be an advisor to do it for me. The problem is the advisors I see hanging out in Walmart seem to be about 13, so I need to look a little farther afield!

Thanks for the pointers though, appreciate it.
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Old Feb 10th 2009, 11:25 pm
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Default Re: My first US Tax return....

Originally Posted by pwhite8314
Excessively cheap? How dare you sir :-)

So far it seems relatively simple, it's my UK tax return for 2008 that I'm dreading. However, I hate this stuff, and you have a point, although if I'm going to pay for something it would be an advisor to do it for me. The problem is the advisors I see hanging out in Walmart seem to be about 13, so I need to look a little farther afield!

Thanks for the pointers though, appreciate it.
Waste of f***in' time using a tax "expert" from H&R Block or one of the other highstreet tax prep companies, since they invariably get your return wrong and have little or no experience with expat tax issues.

If you find a CPA with expat experience, you're going to be paying $$$.
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Old Feb 11th 2009, 3:47 am
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Default Re: My first US Tax return....

I called a few of the H&R blocks near by, and eventually got a guy at one of them who knew what he was doing. He asked me loads of questions typed in all the numbers and told me to sign a few places. For me it was worth the $150 he charged as it looks like I am getting back loads! ;-)

I also had the stimulus issue, it bumped up my refund by $600. The guy said that he was not 100% sure if I would get it or not due to the fact that I was only partially resident here for 2008, but that it would be decided after my e-filing went in. Fingers crossed ;-) I am not sure I make the conditions to be a tax resident here for 2008, I was only here for 4 months so I wont be surprised if I don't get it.

We had some discussion about my 2008 earnings before I came here. We agreed that although I was only a resident of the US from September on, and that as I had not had any foreign income since becoming a resident here that it was only my income post US residency that really mattered.
For example if I was getting income from a rental property there or some other kind of income during the time I was resident here, which of course I was not. Even if I did disclose my income it was well below the $87,000 that I would have been allowed under the non-discrimination Article in the tax treaty with Ireland. He said that I was not considered a resident until I had my green card, which is what my temp visa became as soon as I arrived here.

I also had to mail in my MA tax return as its my first year to do it. All in all, It was worth the $150 to be honest. I may use it as a template to to it again next year!!
Or just go back to the same place. :-)
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Old Feb 11th 2009, 3:51 am
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Default Re: My first US Tax return....

Originally Posted by starky
...He said that I was not considered a resident until I had my green card...
Proof, right there, that he didn't have a f***ing clue. Hope you took out the extra Audit Insurance that H&R Block offer to cover their incompetence.

NOTE: Just from what you've told us, I can tell you that the guy gave you some significant misinformation. Most of what you put in your post is questionable at best, downright wrong at worst. If you end up being classed as a non-resident for Tax purposes because you didn't meet the Substantial Presence Test then it's going to significantly impact your refund. You were actually a Dual-Status Alien in 2008, and should have followed the IRS rules and filed as such. It's all here on the IRS website.

The question of your tax residency impacts a damn sight more than your $600 stimulus check. If you file as a non-resident alien then you cannot take many of the standard tax deductions that a resident alien or US person can take. Your guy seems deeply confused about the very simple residency tests and elections that you can make to decide whether to file as resident or non-resident.

Since H&R Block guarantee their returns to be correct and accurate, in your position I'd go back for another chat. Have your guy explain how he dealt with your Dual-Status tax residency.

Last edited by dbj1000; Feb 11th 2009 at 4:01 am.
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Old Feb 11th 2009, 4:01 am
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Default Re: My first US Tax return....

Originally Posted by dbj1000
Proof, right there, that he didn't have a f***ing clue. Hope you took out the extra Audit Insurance that H&R Block offer to cover their incompetence.
I thought this bit was good as well:

I also had the stimulus issue, it bumped up my refund by $600. The guy said that he was not 100% sure if I would get it or not due to the fact that I was only partially resident here for 2008, but that it would be decided after my e-filing went in.
Isn't it traditional to get the tax return right before you file it?
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Old Feb 11th 2009, 4:11 am
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Default Re: My first US Tax return....

Thinking about this a little more, I think the statement about the Green Card is that you met the Green Card Test.

As a result, your return should have been filed as a Resident Alien, despite you not meeting the Substantial Presence Test.

That said, you should have included all your foreign earned income during 2008, regardless of whether you earned it before you arrived in the US. You're being taxed just like an American, and as such your tax situation is the same as an American who worked from January 1st to your emigration date in September in a foreign country. Just because you earned less than the Foreign Earned Tax Exclusion cap doesn't make you exempt from reporting that income. That alone is a major issue, in my opinion.
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Old Feb 11th 2009, 5:24 am
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Default Re: My first US Tax return....

Originally Posted by dbj1000
That said, you should have included all your foreign earned income during 2008, regardless of whether you earned it before you arrived in the US. You're being taxed just like an American, and as such your tax situation is the same as an American who worked from January 1st to your emigration date in September in a foreign country. Just because you earned less than the Foreign Earned Tax Exclusion cap doesn't make you exempt from reporting that income. That alone is a major issue, in my opinion.
I wouldn't worry too much about that if no tax would be due. The IRS never penalizes taxpayers just because a form is filled out incorrectly when no tax is owed.
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Old Feb 11th 2009, 5:28 am
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Default Re: My first US Tax return....

Originally Posted by dbj1000
Thinking about this a little more, I think the statement about the Green Card is that you met the Green Card Test.

As a result, your return should have been filed as a Resident Alien, despite you not meeting the .

That said, you should have included all your foreign earned income during 2008, regardless of whether you earned it before you arrived in the US. You're being taxed just like an American, and as such your tax situation is the same as an American who worked from January 1st to your emigration date in September in a foreign country. Just because you earned less than the Foreign Earned Tax Exclusion cap doesn't make you exempt from reporting that income. That alone is a major issue, in my opinion.
I take your point. However I was not here long enough in 2008 to meet the Substantial Presence Test. I was a resident of another country for tax purposes in 2008. Your right that just because the amount in question was below the Foreign earned tax cap does not mean I can automatically not report it. I never made this claim. I said that it was below it as it happened. The reason I believe it does not need to be reported is because I was a tax resident of another country for 2008, that has a tax treaty with the US. Also according to the IRS site:

"If you are treated as a resident of a foreign country under a tax treaty, you are treated as a nonresident alien in figuring your U.S. income tax. For purposes other than figuring your tax, you will be treated as a U.S. resident."

"If you are a U.S. resident for the calendar year, but you were not a U.S. resident at any time during the preceding calendar year, you are a U.S. resident only for the part of the calendar year that begins on the residency starting date."

Clearly tax residency and immigration related residency mean different things at different times.

I think how to file your first years taxes depends on your personal situation, and how much money is involved. If I had earned millions, last year in a country that had more favorable tax penalties and a tax treaty with the US, then I could claim that I was non resident in the US, and be perfectly entitled to do so. (as long as I did not meet the Substantial Presence Test of course as I don't) This income would be deemed taxable in another jurisdiction and any claim on it by the IRS would come down to the terms of the tax treaty between the two countries.
I think every ones case will be different in the first year. Depends on visas/length of time in the US/money involved. Its not a one size fits all scenario, and I think its clear from the IRS site that there are a number of ways of dealing with domestic/foreign partial tax returns, and that there is a choice on what way to go about it.
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Old Feb 11th 2009, 12:11 pm
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Default Re: My first US Tax return....

Originally Posted by starky
I take your point. However I was not here long enough in 2008 to meet the Substantial Presence Test. I was a resident of another country for tax purposes in 2008. Your right that just because the amount in question was below the Foreign earned tax cap does not mean I can automatically not report it. I never made this claim. I said that it was below it as it happened. The reason I believe it does not need to be reported is because I was a tax resident of another country for 2008, that has a tax treaty with the US. Also according to the IRS site:

"If you are treated as a resident of a foreign country under a tax treaty, you are treated as a nonresident alien in figuring your U.S. income tax. For purposes other than figuring your tax, you will be treated as a U.S. resident."

"If you are a U.S. resident for the calendar year, but you were not a U.S. resident at any time during the preceding calendar year, you are a U.S. resident only for the part of the calendar year that begins on the residency starting date."

Clearly tax residency and immigration related residency mean different things at different times.

I think how to file your first years taxes depends on your personal situation, and how much money is involved. If I had earned millions, last year in a country that had more favorable tax penalties and a tax treaty with the US, then I could claim that I was non resident in the US, and be perfectly entitled to do so. (as long as I did not meet the Substantial Presence Test of course as I don't) This income would be deemed taxable in another jurisdiction and any claim on it by the IRS would come down to the terms of the tax treaty between the two countries.
I think every ones case will be different in the first year. Depends on visas/length of time in the US/money involved. Its not a one size fits all scenario, and I think its clear from the IRS site that there are a number of ways of dealing with domestic/foreign partial tax returns, and that there is a choice on what way to go about it.
But you're wrong. You met the Green Card test (which only requires you to hold a Green Card for any number of days during the tax year). As a result, you should not be filing as a non-resident alien.

Yes, you have a choice when you're in your first year and meet the Green Card test but not the Substantial Presence test, but other than in exceptional circumstances, it's not the right choice to actually choose to be non-resident.

Last edited by dbj1000; Feb 11th 2009 at 12:20 pm.
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Old Feb 11th 2009, 12:17 pm
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Default Re: My first US Tax return....

Starky, you know all my arguing isn't going to change the tax return you filed, but you should seriously consider going back to H&R Block and have them double-check this residency issue.

Not because of how much money you earned, or your foreign income or to file a "correct" return (although that's their job) but simply for one reason:

You can't possibly be getting the biggest refund you're entitled to if you're filing as a non-resident. In that status you can't take most of the significant tax deductions that a resident can take. You're losing money if you incorrectly file as non-resident.

If you had earned more than the Foreign Earned Income exclusion limit in the months you were in the UK, it would be a possible advantage to file as a non-resident, and balance what you're losing in US deductions against what you'd potentially lose in additional tax on your UK income. But you didn't earn over that limit, so you're just throwing away US tax refund dollars.

Last edited by dbj1000; Feb 11th 2009 at 12:21 pm.
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Old Feb 11th 2009, 4:02 pm
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Default Re: My first US Tax return....

I will, to be honest, I have never had to deal with US tax before, so I may not even be explaining it right. When I have time I will go back and have them check it all again. :-)

Originally Posted by dbj1000
Starky, you know all my arguing isn't going to change the tax return you filed, but you should seriously consider going back to H&R Block and have them double-check this residency issue.

Not because of how much money you earned, or your foreign income or to file a "correct" return (although that's their job) but simply for one reason:

You can't possibly be getting the biggest refund you're entitled to if you're filing as a non-resident. In that status you can't take most of the significant tax deductions that a resident can take. You're losing money if you incorrectly file as non-resident.

If you had earned more than the Foreign Earned Income exclusion limit in the months you were in the UK, it would be a possible advantage to file as a non-resident, and balance what you're losing in US deductions against what you'd potentially lose in additional tax on your UK income. But you didn't earn over that limit, so you're just throwing away US tax refund dollars.
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Old Feb 11th 2009, 6:18 pm
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Default Re: My first US Tax return....

Originally Posted by dbj1000
But you're wrong. You met the Green Card test (which only requires you to hold a Green Card for any number of days during the tax year). As a result, you should not be filing as a non-resident alien.

Yes, you have a choice when you're in your first year and meet the Green Card test but not the Substantial Presence test, but other than in exceptional circumstances, it's not the right choice to actually choose to be non-resident.
That was my conclusion in our first year.. DH entered as a PR (same as starky) in November and was considered resident for the entire tax year under the Green Card test.
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