Taxes

Old Feb 26th 2007, 10:28 pm
  #1  
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Default Taxes

Hi

I seem to spend most of my year dealing with taxes, and now its time for me to file over here for the first time. I am on an L-1B, and my US situation is quite simple in that I only have my work income and some bank interest to report.

However in the UK, I earned some money before I came, I rent a house, I earn interest and have sold shares.

I thought I may be able to deal with this myself using Taxact, but I am just confused with all the foreign stuff (perhaps another package deals with this better), and after speaking to my boss about it, he recommended his CPA who charged him about $350. Now I know that H&R block can charge over $200 for slightly complicated situations, so thought this wasn't too bad, but I have just spoken to him and he reckons that he is probably gonna have to do a lot of research and it is gonna be about $500.

So what is a reasonable amount to pay for a decent CPA?

Or is there anybody out there who has been in a similar situation and managed to do this it themselves?

I guess I am opening myself to a whole lot of spam!!

Thanks
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Old Feb 27th 2007, 1:22 am
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Default Re: Taxes

Originally Posted by Longy View Post
Hi

I seem to spend most of my year dealing with taxes, and now its time for me to file over here for the first time. I am on an L-1B, and my US situation is quite simple in that I only have my work income and some bank interest to report.

However in the UK, I earned some money before I came, I rent a house, I earn interest and have sold shares.

I thought I may be able to deal with this myself using Taxact, but I am just confused with all the foreign stuff (perhaps another package deals with this better), and after speaking to my boss about it, he recommended his CPA who charged him about $350. Now I know that H&R block can charge over $200 for slightly complicated situations, so thought this wasn't too bad, but I have just spoken to him and he reckons that he is probably gonna have to do a lot of research and it is gonna be about $500.

So what is a reasonable amount to pay for a decent CPA?

Or is there anybody out there who has been in a similar situation and managed to do this it themselves?

I guess I am opening myself to a whole lot of spam!!

Thanks
when did you first arrived in US?, you are either a dual resident status and file two different forms or choose to be treated as full year resident(subject to your substantial presence test) and claimed foreign tax credit for the UK income you earned.
I use tax cut to check my tax situation, more complicated than yours. although the company has assigned KPMG to handle our tax return. I will be waiting to see if its the same result as the one I have in the package software. I will let you know.
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Old Feb 27th 2007, 2:36 am
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Default Re: Taxes

Originally Posted by abboy View Post
when did you first arrived in US?, you are either a dual resident status and file two different forms or choose to be treated as full year resident(subject to your substantial presence test) and claimed foreign tax credit for the UK income you earned.
I use tax cut to check my tax situation, more complicated than yours. although the company has assigned KPMG to handle our tax return. I will be waiting to see if its the same result as the one I have in the package software. I will let you know.
I came here in January. I have been here for most of the year (been back to the UK for two short visits) so am resident for tax purposes as far as I understand.

When you say two different forms, do you mean filing to the UK and US or are there two different forms to be filed for the US? I filed my UK taxes earlier this year - and assume I will have to do that again next year.
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Old Feb 27th 2007, 3:26 am
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Default Re: Taxes

I've never been in your situation, however I've been in the US for over 11 years now, and have used Turbo Tax for the last few years. It does seem to take you through (Deluxe Version) pretty much every scenario you might find yourself in. I used to do our taxes on paper, but when we started buying and - particularly - selling long-term and short-term hold shares, then I turned to software. We went to H&R Block for the first couple of years we were here, but they charged us just over $100 for a basic 1040 and state, with no mortgage interest, no shares, etc. Since I studied their forms and got the booklets, I've been doing our taxes myself.
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Old Feb 27th 2007, 4:30 am
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Default Re: Taxes

Originally Posted by Longy View Post
Hi

I seem to spend most of my year dealing with taxes, and now its time for me to file over here for the first time. I am on an L-1B, and my US situation is quite simple in that I only have my work income and some bank interest to report.

However in the UK, I earned some money before I came, I rent a house, I earn interest and have sold shares.

I thought I may be able to deal with this myself using Taxact, but I am just confused with all the foreign stuff (perhaps another package deals with this better), and after speaking to my boss about it, he recommended his CPA who charged him about $350. Now I know that H&R block can charge over $200 for slightly complicated situations, so thought this wasn't too bad, but I have just spoken to him and he reckons that he is probably gonna have to do a lot of research and it is gonna be about $500.

So what is a reasonable amount to pay for a decent CPA?

Or is there anybody out there who has been in a similar situation and managed to do this it themselves?

I guess I am opening myself to a whole lot of spam!!

Thanks
Our CPA is in NYC (Expensive rents, high salaries for staff), $500 is very high, basically filling in boxes. Are you giving them, totals or boxes of receipts and they have to do all the boring work?
Reg. Frank R.
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Old Feb 27th 2007, 4:43 am
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Default Re: Taxes

Originally Posted by frrussre View Post
Our CPA is in NYC (Expensive rents, high salaries for staff), $500 is very high, basically filling in boxes. Are you giving them, totals or boxes of receipts and they have to do all the boring work?
Reg. Frank R.
Well I can probably give totals for most of what needs filling in, its just knowing what needs to go in, and where. I just want to make sure I get it done properly.

I agree it sounds very expensive though
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Old Feb 27th 2007, 5:11 am
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Default Re: Taxes

Welcome to tax hell.

There is one technique -- if you are nearly 100% sure you don't owe the IRS, and they owe you -- you can file for a one-time 90 day extension.

The CPAs will charge far less after April 15.
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Old Feb 27th 2007, 7:39 am
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Default Re: Taxes

Quick question thats slightly away fom original posters (sorry)

My wife came over on a transfer but has only started to be paid by the company in the US from the 8th Feb. Will she need to file a return this year?
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Old Feb 27th 2007, 9:39 am
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Default Re: Taxes

Originally Posted by ScottMc View Post
Quick question thats slightly away fom original posters (sorry)

My wife came over on a transfer but has only started to be paid by the company in the US from the 8th Feb. Will she need to file a return this year?
You'll have to decide what her status was on 31st December 2006; whether or not you were married on that date also impacts her status (and yours).
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Old Feb 27th 2007, 10:01 am
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Default Re: Taxes

Thanks Snowbunny, we'll just have the UK taxes then in that case as she was paid by her UK office up until Feb. I only just arriving there next week.
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Old Feb 27th 2007, 10:57 am
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Default Re: Taxes

Hi Longy,

I'm going through a similar situation myself...worrying about both the Uk and US taxes is horrible. I'm at the point where I am going to pull my hair out.

I worked in the USA in 2005 and 2006...but now am working in the UK...so I also need to declare my tax here. After talking to people on this forum and to some UK/US tax people here in the UK this is what I plan to do.

After being quoted £800-£1000 to prepare the tax returns for myself and my husband I am going to go with doing them myself. I am going to use turbo tax and do the best I can. Turbo tax seems pretty good. I did a quick run through online on their website....www.turbotax.com and they seem to ask all the right questions. I figure...if I mess it up the IRS will let me know....and then I can pay the extra or get the refund but at least I filed a return and everything looks good.

I used H&R block in 2005. I thought they were really good. they charged me $250...but I had to go to a few branches until they could find someone that could deal with my non resident stauts.

Hope this helps.
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Old Feb 27th 2007, 1:34 pm
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Default Re: Taxes

Originally Posted by snowbunny View Post
Welcome to tax hell.

There is one technique -- if you are nearly 100% sure you don't owe the IRS, and they owe you -- you can file for a one-time 90 day extension.

The CPAs will charge far less after April 15.
actually the extension is 6 months, taking you through to october ( I always do this)

even if you do owe taxes, the penalty is pretty small. I prefer to have the money in my account
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Old Feb 27th 2007, 1:36 pm
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Default Re: Taxes

Originally Posted by snowbunny View Post
Welcome to tax hell.

There is one technique -- if you are nearly 100% sure you don't owe the IRS, and they owe you -- you can file for a one-time 90 day extension.

The CPAs will charge far less after April 15.
Unfortunately I think I do owe, and thats just on the basis of the US income (didn't really know what I was doing with the exclusions when I first arrived, would have been sensible to put a 0 to start) - am concerned about any affect the UK income is going to have on this.
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Old Feb 27th 2007, 1:40 pm
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Default Re: Taxes

Originally Posted by virginiadare View Post
Hi Longy,

I'm going through a similar situation myself...worrying about both the Uk and US taxes is horrible. I'm at the point where I am going to pull my hair out.

I worked in the USA in 2005 and 2006...but now am working in the UK...so I also need to declare my tax here. After talking to people on this forum and to some UK/US tax people here in the UK this is what I plan to do.

After being quoted £800-£1000 to prepare the tax returns for myself and my husband I am going to go with doing them myself. I am going to use turbo tax and do the best I can. Turbo tax seems pretty good. I did a quick run through online on their website....www.turbotax.com and they seem to ask all the right questions. I figure...if I mess it up the IRS will let me know....and then I can pay the extra or get the refund but at least I filed a return and everything looks good.

I used H&R block in 2005. I thought they were really good. they charged me $250...but I had to go to a few branches until they could find someone that could deal with my non resident stauts.

Hope this helps.
It sounds a good plan, I might take a look at Turbotax. Taxact gets very confusing once you get into the foreign income stages, I think it could be more helpful, but it is a cheap one.

The one worry I have is that everybody seems to talk as if getting an Audit from the IRS is the worst thing imaginable. On top of all this I got married earlier this year and will be going through AOS so don't want to screw about with any of this.
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Old Feb 27th 2007, 2:34 pm
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Default Re: Taxes

longy,

i would have a look at turbotax. You can go have a test run on their website and then if you want to go ahead with it you pay at the end. I also saw on www.ebay.com there were loads for sale at a cheaper price.

I wouldn't worry about getting audited...I fully expect to get audited...They shouldn't make taxes so difficult to navigate!!! My husband has to provide copies of his tax returns when he does his affidavit of support for me....so our taxes have to be good...but i'm hoping the fact that we tried our best around a very difficult situation will be enough for us. I really can't afford to pay upwards of £1000 to do a couple of tax returns.
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