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Tax Filing - Exchange Rates

Tax Filing - Exchange Rates

Old Jan 30th 2018, 7:46 pm
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Default Tax Filing - Exchange Rates

I dug this out from a post a couple of years back. Does this still hold true do you know? There are two different rates quoted.

Thanks

For FBAR and 8938 (FATCA) you should use the Treasury end of year rate http://www.fms.treas.gov/intn.html#rates

The IRS Yearly Average Currency Rate may be used for, "income received evenly throughout the tax year" eg a regular pension payment. http://www.irs.gov/Individuals/Inter...Exchange-Rates
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Old Jan 30th 2018, 7:50 pm
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Default Re: Tax Filing - Exchange Rates

Originally Posted by iceflow View Post
I dug this out from a post a couple of years back. Does this still hold true do you know? There are two different rates quoted.

Thanks

For FBAR and 8938 (FATCA) you should use the Treasury end of year rate http://www.fms.treas.gov/intn.html#rates

The IRS Yearly Average Currency Rate may be used for, "income received evenly throughout the tax year" eg a regular pension payment. http://www.irs.gov/Individuals/Inter...Exchange-Rates
Yes that is still the case. You do not have to use the Average Currency Rate but, in my experience, it has always been more favorable than using the mid-market rate for the date on which payments are received.

The direct link to the Treasury Rate is here:
https://www.fiscal.treasury.gov/fsre...rrentRates.htm
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Old Jan 30th 2018, 8:24 pm
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Default Re: Tax Filing - Exchange Rates

Originally Posted by MidAtlantic View Post
Yes that is still the case. You do not have to use the Average Currency Rate but, in my experience, it has always been more favorable than using the mid-market rate for the date on which payments are received.

The direct link to the Treasury Rate is here:
https://www.fiscal.treasury.gov/fsre...rrentRates.htm
+1

I maintain a spreadsheet with my UK monthly pension payments converted to $s using the rate on the dates I receive them. I then total the $s for the 12 payments and also calculate the annual £ total converted to $s using the published average IRS rate and it is also most advantageous to me to use the IRS average rate.
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Old Jan 31st 2018, 2:59 pm
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Default Re: Tax Filing - Exchange Rates

OK folks, thanks
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Old Jan 31st 2018, 7:03 pm
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Default Re: Tax Filing - Exchange Rates

I made a withdrawal for the first time from my UK personal pension and HMRC refunded my tax as it was less than the annual allowance. Do I have to pay US tax?

I think the answer is yes; I'm just asking to be sure, as I haven't read the Tax Treaty and I want to check here with people who may have read it in case there's anything that says if you're exempt in one country you're also exempt in the other, which may apply here. I'm both a UK and US citizen and am resident in the US.

Thanks.
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Old Jan 31st 2018, 7:22 pm
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Default Re: Tax Filing - Exchange Rates

I think you are subject to US tax.
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Old Jan 31st 2018, 7:46 pm
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Default Re: Tax Filing - Exchange Rates

Originally Posted by lansbury View Post
I think you are subject to US tax.
+1

I was a dual citizen also living in the USA when I started receiving a UK pension. Even now that I am back in the UK I still pay US taxes on my UK pensions (I now receive 2 of them). I create a substitute 1099-R for each of my pensions. However I now also pay UK tax on my UK pensions so I claim an FTC on my US taxes so I am not double taxed.
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Old Jan 29th 2019, 2:31 am
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Default Re: Tax Filing - Exchange Rates

Hi all, I normally use the exchange rates shown here: https://www.irs.gov/individuals/inte...exchange-rates

Maybe I need to wait until Feb 2019, or just give them chance to update after the shutdown? (It only shows up to 2017. No 2018 numbers for sterling to the dollar yet)

What do you do for UK income you received in 2018?
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Old Jan 29th 2019, 2:42 am
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Default Re: Tax Filing - Exchange Rates

Originally Posted by Hanco View Post
Hi all, I normally use the exchange rates shown here: https://www.irs.gov/individuals/inte...exchange-rates

Maybe I need to wait until Feb 2019, or just give them chance to update after the shutdown? (It only shows up to 2017. No 2018 numbers for sterling to the dollar yet)

What do you do for UK income you received in 2018?
They have indeed been delayed because of the shutdown. Presumably they'll appear over the next three weeks (before the next shutdown :-)).
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Old Jan 29th 2019, 8:36 am
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Default Re: Tax Filing - Exchange Rates

Originally Posted by Hanco View Post
Hi all, I normally use the exchange rates shown here: https://www.irs.gov/individuals/inte...exchange-rates

Maybe I need to wait until Feb 2019, or just give them chance to update after the shutdown? (It only shows up to 2017. No 2018 numbers for sterling to the dollar yet)

What do you do for UK income you received in 2018?
I also use the exchange rate in the link above but have never filed before the IRS 2018 rates have been released. If you look at my post above you'll see an alternative IRS accepted method used XE.com but I have always found that the IRS average rate is much more advantageous to me. Well worth waiting until that rate is published IMO.
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Old Jan 29th 2019, 11:24 am
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Default Re: Tax Filing - Exchange Rates

Originally Posted by durham_lad View Post
I also use the exchange rate in the link above but have never filed before the IRS 2018 rates have been released. If you look at my post above you'll see an alternative IRS accepted method used XE.com but I have always found that the IRS average rate is much more advantageous to me. Well worth waiting until that rate is published IMO.
I agree.
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Old Jan 30th 2019, 2:12 pm
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Default Re: Tax Filing - Exchange Rates

The IRS Yearly Average Currency Exchange Rates for 2018 are now published. https://www.irs.gov/individuals/inte...exchange-rates

Yeah, my tax return will soon be on the way!
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Old Jan 30th 2019, 2:42 pm
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Default Re: Tax Filing - Exchange Rates

Originally Posted by MidAtlantic View Post
The IRS Yearly Average Currency Exchange Rates for 2018 are now published. https://www.irs.gov/individuals/inte...exchange-rates

Yeah, my tax return will soon be on the way!

Cool, thanks for the update.
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Old Jan 30th 2019, 7:05 pm
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Default Re: Tax Filing - Exchange Rates

Originally Posted by MidAtlantic View Post
The IRS Yearly Average Currency Exchange Rates for 2018 are now published. https://www.irs.gov/individuals/inte...exchange-rates

Yeah, my tax return will soon be on the way!
Thanks for that
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Old Jan 31st 2019, 6:35 pm
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Default Re: Tax Filing - Exchange Rates

Thanks. They don’t seem to have quite as generous this year with their rate. I think they may have heard about transferwise and spot rates.
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