TAX return confusion
 

Hi all,

I am hijacking my husbands login.....I shall set the scene before I ask my question :lol:

I am a dual US/UK national (with US passport and SSN) - born in the UK to a USAF father and UK mother, then moved out to the US when I was a baby, but returned to the UK when I was 5 (now 32). I have received an approved notice from the Embassy for my I-130 visa petitions for my husband (UK national) and 2 young daughters (7&6).

I have never filed a TAX return due to A) never being aware of such a thing for US citizens living in the UK needing to do - never once crossed my mind or was ever mentioned to me, B) when I was aware of it towards the end of last year (2016) my husband and I researched this need and it appeared quite clear that I was exempt from needing to file any information :- 2014 - part time working which was UK taxed, 2015 - full time student with no taxed income, 2016 - full time student with very low UK taxed income (still is the case now as 2016). We own our home, but have never sold a property and I have never had any sum of money to 'speak of' in my account, it has always been minimal. I did not think any further in to it.....

NOW I am over thinking it all due to being on the path to the stage of the process. I am very worried that I should have been filing TAX returns even though I believe I am exempt....... and this will hinder our application process.......

Our assets (home equity, husbands savings) are what we will be including in my Affidavit of support when the time comes and this will be our financial supporting evidence......

Is anyone able to offer any advice on our situation, I am still very baffled with what to do.....on here it seems this is a must but on the IRS website it seems as though I am exempt and I just need to write a letter explaining why I believe I am exempt?

If there is anything anyone wishes to ask if I have not made myself clear, please to do hesitate - I appreciate any advice offered,

Thank you and kind regards,

Mel :cool:

Re: TAX return confusion
 

A small clarification (semantics) to start with: as a USC, you are never exempt from filing a US tax return. You may meet criteria which means you fall below the threshold for filing. That's where you need to start. Your default position is filing "married separate". The threshold for 2016 is $4,050. For 2015 and 2014, it will have been slightly less. If your total income is below the threshold, you do not need to file.

Any joint accounts? Any income from jointly held accounts? That income will count towards your total amount. UK Benefits?

The threshold for "married filing jointly" is much higher (starting at $20,700 for 2016), but your husband would have to declare his worldwide income as well. Since, at present, he is an NRA, he would also sign a statement saying he wished to be taxed as a US Person for those years, and to do this, a return would have to be filed.

Note, the US FEIE and FTC (Foreign Earned Income Exclusion and Foreign Tax Credit) are not allowed until you file a return claiming them.

Check the basic thresholds for MFS (Separately) for 2015 and 2014. You can file a return even if below the threshold. That's a comment to be made by those on this site far more savvy with immigration.

Re: TAX return confusion
 

It will not hinder your application process. If you were below the IRS threshold for filing a return, you need only include a note in your immigration package that you are below the threshold and were not required to file. If you had earnings in the UK that were taxed, it's unlikely that you'll have to pay any US tax. As I've mentioned elsewhere, when you complete a US tax return you include your UK income at the beginning and subtract it out later as having already been taxed.

Go ahead and file the 2016, 2015, and 2014 tax returns. Keep in mind that the requirement - for US immigration purposes - is, simply, to file your taxes... nothing more than that. They don't have to be processed and whether or not there's any US tax to pay is irrelevant. They don't even need to be correct (so long as your intent is not to commit fraud)! The requirement is, simply, to file - and US immigration doesn't care what other issues you have with the IRS. Neither reports to the other. So, filing the tax returns, from a US immigration POV, is a reporting requirement only.

Ian

Re: TAX return confusion
 

For 2014, the MFS threshold was $3,950 (@0.632 = £2,496)
For 2015, the MFS threshold was $4,000 (@0.681 = £2,724)
For 2016, the MFS threshold was $4,050 (@0.770 = £3,119)

https://www.irs.gov/individuals/inte...exchange-rates

Re: TAX return confusion
 

Most folks would use the IRS streamlined procedures to catch up with delinquent tax returns & FBARs. Should you have a UK mortgage, be prepared for a large US tax liability on the foreign currency gain when it is repaid.

Re: TAX return confusion
 

Hopefully, the OP is doing the required pre-planning before moving to the US.

Hopefully, the mortgage was 100% in the spouses (NRA) name and can be disposed of prior to the move without any possible currency gain needing to be taken into consideration.

Hopefully, in regards to past returns and since there are 2 children, any UK benefits were 100% in the spouses name.

Hopefully, any assets drawing unfavourable treatment in the US were 100% in the spouses name and are being disposed of prior to moving to the States. (S&S ISAs, any UK based mutual type funds, etc.)

Re: TAX return confusion
 

Hi all, thank you very much for all of your help.

I have now started the process of completing my TAX return and hopefully by starting it, this will show my honest intentions......
We certainly have made plans to be able to pay our TAX due from our house sale, we are trying to ensure that we do not experience any shocks along the way that are unavoidable, along with creating any problems when we go to interviews etc, that are unavoidable.

Thank you and kind regards again,

Mel :)