Part-year tax return
 

Any help or advice would be greatly appreciated!

Myself (green card holder) and my husband (US citizen, but born and raised in the UK) moved to the States in June 2014. From January to June 2014 we lived and worked in the UK - paying UK taxes. From June 2014 to present we have lived in the US and I have been working and paying US taxes.

Now we have to file taxes. I tried using a 2555EZ, then calculating this into a 1040 alongside the figures from my W2. The problem being that 'in a part tax year, the standard deductions on the 1040 do not apply'. ie/ the deduction is for a 12 month period, but I am only paying tax on 6 months.

I have tried Turbo Tax, which would not work for me as I am not a US citizen. So I relented and went to HR Block - who seem to be having a worse time than us figuring it out.

Does anyone know how to file taxes in your first part-year resident in the US?

Thank you in advance!

Re: Part-year tax return
 

You would probably benefit from filing a "dual status" return (which is the technical name for filing for a part year).

You should however compare the result of a dual status return to filing as a US resident, which would mean including income from outside the US between 1/1/14 and your arrival in the US, which although counter-intuitive, would allow you to claim the "standard deduction" (from gross income) which means that it can be beneficial for some filers to file as a resident for the whole year.

Re: Part-year tax return
 

I arrived August last year on L1 and filed fine with Turbo Tax (although had to post rather than e-file due to no SSN for the kids). Have I done something wrong?

Re: Part-year tax return
 

Did you (i) file on all your income for 2014, including before you arrived in the US, or (ii) file a "dual status" return? ...... If neither (i) nor (ii) then you probably need to file an "amended return". Even if you did (i), and so are technically in compliance, it is likely advantageous for you to have done (ii).

If you used some sort of hybrid approach, declaring only your US income but taking the full annual deduction (allowance), then your return is definitely incorrect. If you receive a refund on the basis of your return I strongly recommend that you do not cash the check.

Re: Part-year tax return
 

Unless you disclosed your entire year earnings - i.e., earnings made before you arrived in the US - then you have indeed done it wrong. It is usually advantageous for you to file as 'dual status' in your first year in the US.

A dual status tax return can _not_ be completed via TurboTax, so unless you declared all worldwide income, then yes I'm afraid you have very much done it wrongly. You will need to re-file an amended return.

My advice? Get an accountant / tax preparer to do this for you.

Re: Part-year tax return
 

The advice is very much appreciated. I'll seek further professional guidance.

PwC advised that I file dual status through Turbo tax knowing my full situation as they supported through the relocation. I was clear about the date I became resident on the filing (1st August last year) and declared that I had been tax resident in France up to that date. Does that not cause Turbo Tax to automatically therefore only allow for part year deductions?

Thanks again.

Re: Part-year tax return
 

WTF! I wonder if that is the advice they routinely give to clients of their tax consultancy? :rolleyes:

Re: Part-year tax return
 

only when the funding for fees runs out :-)

Re: Part-year tax return
 

Whoever recommended that is an idiot. I would insist on speaking to someone different if you speak with PwC next time.

Re: Part-year tax return
 

Interestingly, while TurboTax doesn't support dual-status returns, TaxAct (which I use) does, but it involves preparing two separate returns and sounds a little confusing.
Dual-Status Taxpayer | Help Topics | TaxACT

I'd personally use a professional for any dual-status return though, especially since there could easily be other complications, like relocation expenses, how to deal with buying a car or other major purchase, and others.

Re: Part-year tax return
 

I arrived on the 1st August, spending less than 6 months in the USA in the last tax year. HR Block have insisted I am filing as non-resident ? Are they right ?

....because I have been told I need to pay the dear IRS 1000 bucks.....

Steve

Re: Part-year tax return
 

Probably.

Have a look at this, including the exceptions at the bottom: Substantial Presence Test

Of course, if you have a green card, it's different.

Not sure if you owe $1000, without going into your tax records. You do need to make sure they are to account for all the tax you paid in the UK under the dual-tax treaty.

Re: Part-year tax return
 

No, fail the substantial presence test. No greencard.

Thing is, I haven't been asked about any income previous to arriving in the USA.

Steve

Re: Part-year tax return
 

Actually, I could be wrong on that detail. As I married a US citizen, I was able to make the election to do a joint return as a full-year resident.