margiedd

Hello,

I would really appreciate your advice on reporting foreign earned income.

I am married to a USC and have moved to the US from the UK in mid-August 2012. I got my Green card shortly after arrival.
I had worked up until mid July in the UK and paid all due tax on my income. I got a job and started working in the US in mid-November.

We have started doing our tax return, married filling jointly, using TurboTax and have come across difficulties reporting my foreign earned income. Our understanding is that my foreign earned income should not be taxed but as we go through the form it appears they are taxing us. The choices we get are that I am:
1) Resident alien
2) Non resident alien
In both cases I am not getting the foreign earned income credit. What are we doing wrong?

Appreciate your advice.

AlphaTangoMike

Hi,

To be honest TurboTax may not be the best solution for your tax situation as it is not well equipped to handle "non-standard" tax returns. (I.e. part year resident, foreign income, etc.)

You may want to consult a tax professional to assist with your taxes for this year.

After your first full year in the US, you may be able to use TurboTax for your 2013 taxes.

rpjs

That is what we did. We went to H&R Block last year, for our first tax return which included UK income and part-year residence, plus a UK balance high enough to trigger FBAR. Happily our local office had someone experienced in handling ex-pats (she was an Indian ex-pat herself) and it was pretty straight-forward.

This year our tax affairs are lot more straightforward - no UK income or large ballances - and we've used TurboTax.

nun

As you are filing married jointly you will be treated as a US resident for the entire tax year. You will have to include your worldwide income on your US taxes anbd use a 1116 to claim credit for PAYE tax you paid.

If you filed separately you would be dual status and would not need to include foreign income earned before you became US resident.

margiedd

Many thanks for the useful advice! Much appreciated.

Sounds like the best option may be to look for a professional as we also will need to do FBAR.

Roy, were you guys able to file jointly or was the advice to file separately?

margie

rpjs

We filed jointly, which is usually most advantageous. We moved very early in Jan and only had one month of UK-sourced income to deal with though.

margiedd

Thanks Roy! We found a number of HR Block professionals with the right expertise so hopefully they can help. We were trying to avoid paying extra but the hassle of trying to figure it out ourselves right now seems too big.