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Taxes - do I need to file?

Taxes - do I need to file?

Old Apr 1st 2011, 5:57 pm
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Default Taxes - do I need to file?

Hi all,

I am a Green Card holder currently resident in the US. I took up residency early March 2011 with my wife who is a USC.

It says on form 1040 that the form is for the year 1 Jan 2010 to 31 Dec 2010. Therefore I assume that I don't need to file taxes now but I will need to file them in April 2012. Is that correct? Does this mean that my wife who was resident with me in the UK until early March 2011 should file taxes individually for 2010?

What sort of records will I need to keep to do my taxes? Do I need to keep receipts for everything I buy or just certain items? My wife will be doing some US freelance work in addition to her normal job with a UK based employer (she has obtained a business license and will invoice the UK company who will pay her in dollars - they're treating her as a foreign contractor). I will be starting work soon in the US working for a US company. We also have some money in the UK such as bank accounts, an ISA and a pension. Is it feasible to do our own taxes or is it worth paying an accountant?

Many thanks for any advice. I started reading the guide to filling out the 1040 but it was ridiculously complex.

H
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Old Apr 1st 2011, 6:26 pm
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Default Re: Taxes - do I need to file?

Originally Posted by henryc View Post
I took up residency early March 2011 with my wife who is a USC.
If you moved to the US in March 2011, then you have no tax filing obligation for 2010. If you were married at any time during 2010, your wife should file as "married" ... either "married, filing separately" or "married, filing jointly" - whichever works out to be more financially advantageous to you.


What sort of records will I need to keep to do my taxes? Do I need to keep receipts for everything I buy or just certain items?
You only need receipts for things that are tax deductible. The list is too exhaustive to put here, so check at www.irs.gov.


Is it feasible to do our own taxes or is it worth paying an accountant?
Many people do their own taxes. If it helps you to sleep better at night, hire a professional.


I started reading the guide to filling out the 1040 but it was ridiculously complex.
Welcome to the US!

Ian
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Old Apr 1st 2011, 6:42 pm
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Default Re: Taxes - do I need to file?

Your greencard started in March 2011 - but were you living in the US for any of 2010?

If you did not live in the US for any of 2010 then you do not need to file a 2010 tax return (due April 18th 2011). If you did live in the US for part of 2010 (regardless of your greencard status) you may have to file for 2010.

You will have to file your 2011 tax return (for income received 01/01/11 to 12/31/11) by April 15 2012. As a self-employed person, your wife will want to keep all receipts that are related to expenses that can be deducted on the tax return. Take a look at this page from the IRS:

http://www.irs.gov/publications/p334/index.html

and particularly chapter 8. Other than that she will obviously need to keep up some kind of accounting system to keep tabs on things and fulfill any local laws to do with setting up a business.

For you, your employer will give you a form W2 at the end of the year, which has everything needed for your tax return that relates to income they paid you. Banks or any US entities giving you interest, dividends etc. will also send you tax forms at the end of the year. You'll need to make sure you have information on any income that comes to you from the UK too.

I'd print out a copy of the 1040 tax form for this year, and probably 1040 Sch A:
http://www.irs.gov/formspubs/index.html

(download the forms and instructions) and look at all the line descriptions and see if any apply to you. If they do then those are the areas where you want to keep a track of your expenses/payments. For most people who aren't unemployed there's not much you need to track unless you have a mortgage or high medical expenses.

As a married couple living most of 2011 in the US, filing your 2011 tax return (due April 2012) with a status of "married filing jointly" will most likely be best for you. You fill in one tax form with your joint income. Hard to say whether you'd need an accountant come tax time... possibly given that you seem to have a lot of things going on and it will be your first year.

If you got married during 2010 not 2011 then your wife must file as married for 2010 (due Apr 18 2011). If you were married in 2011 she'd just do her normal return for 2010. Hopefully she's been doing US tax returns while in the UK as she's a USC.

Also google FBAR if you have money in UK accounts, which it sounds like you do.

Last edited by Jscl; Apr 1st 2011 at 6:46 pm.
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Old Apr 4th 2011, 3:02 am
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Default Re: Taxes - do I need to file?

Many thanks for the advice
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