Death and Taxes.

[Jaylen Brit 0]

stupid question but this IRS thingy only applies if you worked in the UK right?

Cos I dont and have a non-taxpayer status.. so I have no P45s or whatever

[JayJay 4]

I think so

However it'd be so totally brilliant if someone could post an "idiot's guide" for first time taxpayers somewhere...ie. for someone who knows nothing...zip...nada about US taxes, telling them what forms to fill in, and what to get/submit to be able to do this double tax treaty thing *grinz*

I'm going to look at this P85...would I be filing that AFTER the US tax return? Anyway, I am about to work out more taxes and then *with the fear of God in me* call the IRS so that my MIL and I can have a nice conversation about Federal Prison and how I ought to be taxed twice, and how I am wrong, once again.

*Rooting for our own place....like yesterday....woop woop*

[Mand 1]

Jay Jay

It seems all scary and discombobulated...but it's not really. I followed Reinhard's advice and got it done. I was telling my hubby how to fill the forms in!!

We filed as married filing jointly

You will need to fill out form 2555-EZ (Foreign Earned Income Exclusion) and then include these (UK) earnings as a minus figure in the relevant line on the 1040 form. You can download 2555-EZ from the IRS website or if you get an ungraded version of Turbo Tax, it will ask you all the questions and fill out the forms for you.

We also included a typed letter to the effect that Rob was a U.S. citizen on the last day of the tax year and that I choose to be treated as a U.S. resident for the entire tax year.

Another word of advice before you are up for assault with a deadly weapon (the plates!)...GET OUTTA THERE FAIRLY LIVELY!!! She's talking through her feckin hat and driving you around the bend!! Don't listen to her.

[tsunamihart 0]

JayJay,

Don't worry. You do need to declare your UK income, but under no circumstances will you be taxed twice.

I'm pretty sure there's a foreign tax credit -- if you're lucky you might even get some money back.

Mark

Yes JayJay, I don't think it pertains to you it only is taxed on US made $$$'s

Internal Revenus svc International taxpayers

Scroll down this page

[JayJay 4]

You guys are the cutest I have now completed 2555EZ and actually did complete partially a 1040 as well - though I haven't got all of Ben's W2's in front of me so can't put them all in. It's not that hard Which is surprising

The only question I suppose is this: I had two jobs in the UK during the same time period - Would I fill out two 2555-EZ's or would I just stick both Emplyer's addresses down on the same section seperated by slashes? I could easily fill out two, meaning the total amounts from both forms would equal line 21 on the 1040... Not sure really. I'm kinda presuming two forms would have to be filled or they might go a bit irky down at the ole' IRS

I've pretty much decided to do it all by myself, and then get it checked by my friend Em's accountant. That should curtail any further talk of prison or tax evasion, which I am clearly not in the mood for *laughs manically*!

I did also fill out form 2555 (not the EZ) and kind of thought it might apply more to the US Citizens claiming tax exclusions (who've been here for a while and travel abroad to work) rather than myself, who was dual-status last year and choosing to be taxed as a resident under the substantial presence test So you put my mind to rest on the EZ part!

Thank you so much Mand! And tsunamihart, thank you too! (F)

I suppose the income gets added on the 1040, line 21, but then as we've enclosed the 2555-EZ, that would offset it...

[Mand 1]

You're a fast learner girl!! Nice one. The only difference I believe between 2555 and 2555-EZ is the first is just a shorter version...I rechecked ours and it was 2555 we filled out too.

Now tell your MIL to forget about visiting you in prison, as it's not gonna happen any time soon

I could easily fill out two, meaning the total amounts from both forms would equal line 21 on the 1040... ... I'd prob do that too...but check with your friend's accountant to be on the safe side.

[mawilson 2,133]

JayJay,

Instead of excluding your UK income via Form 2555, you might want to try including it and claiming a

foreign tax credit (Form 1116) against US income tax liability for income taxes paid to the IR in the UK.

I'm not saying it's better, but you should try both methods and pick one that minimises your tax.

Just a thought

Mark

[Yodrak 7]

JayJay,

You wanted to stay in the USA - one of the benefits of living in the USA is the right to be taxed by the USA.

The tax treaty between the USA and the UK relates to your 2nd paragraph - under the terms of the treaty, taxes paid to the UK can be deducted from taxes owed to the USA so that you don't pay twice.

The $80,000 in your 3rd paragraph is the foreign-earned income exclusion. You have to report the foreign-earned income, but then you get to exclude up to $80,000 of it and are taxed only on the amount that exceeds the exclusion.

What I don't know is which is applicable - the terms of the tax treaty or the exclusion - or if you have the option to chose which of the two you will use.

Yodrak

Posting this here as it gets more traffic...

My mother in law rang up the IRS today, and apparantly they said that all of my income from the UK is taxable here in the US. I wasn't aware that was the case?!

Something about that they can offset the taxes I paid in the UK against the taxes here? Now I am seriously worried - this is the last thing I need right now, another problem. Now according to the IRS I have to get hold of my tax information from the UK?

Has anyone else run into this? I thought income up to $80,000 was considered "done" and "dusted" and that the UK share a taxing agreement with the USA. Now apparantly I have to pay taxes twice? I am calling the IRS tomorrow regarding this, but unfortunately it sparked a huge debate as soon as I got home from work today and I am just quite simply wrong.

I am quite miffed. I'd like to be out of here asap anyway, but this is just getting ridiculous. Any help and advice regarding this would be totally appreciated, so that I can go back to the IRS tomorrow, info in hand...

Thanks people!

Your's Truly,

Mrs *Annoyed* Jay

[JayJay 4]

It's the exclusion, not the exemption, as I've found, that you're entitled to as a resident (etc blah)

RANT: (And not directed at you Yodrak - you're a pal )

You're right, I did choose to stay here and be taxed by the USA. What I didn't want was to come in through the door last night, after a day of learning a new job, learning to drive, stressing over every little thing I've done wrong at home, taking care of my husband and be told that if I didn't pay taxes twice, I'd be going to federal prison.

If my first post sounded defensive, well, it's because quite honestly, for once in my life, it really was. I felt like walking out on my entire life at the time because this situation was the last straw in months of being stressed to the max and being in a pretty dire psychological situation, which I won't go into too much here.

Quite hoenstly I felt sick to my stomach this monring over this being the very last of many, and it took me hours to calm down. I got to my upper stress level this morning when the door was shut in my face (won't go into that too much either) and literally thought I was going to faint upon entering work today. The only thing that stopped me was beign able to vent what has been going on to a good friend of mine who knows what's up... So there we go. Jay can get defensive too.

Actually, this all sounds defensive, but I am so on the end of my wire that I am actually not bothered - you know those moods when you honestly think heat could come out of your eyes and melt anything you look at? Well, that's what I'm in. I'm back at the house now, and just as I entered this door, my heart's started racing once again.

[daisy16 0]

jayjay ***very worried****

What you described could be something like an anxiety attack. No need to post details, but I know you didn't experience your little friend a while back. Not sure what happened there, and I have no need to know, however, your stress, emotional state, physical state are all getting to be in a mess.

Please take care of yourself girl, whatever's going on.

Lotsa hugs going your way.

Re the taxes, I have to declare my earnings and taxes paid, for our first tax return together. I suspect UK may have to do the same.

[ChristinaM 0]

The closest thing to a W2 is a P60, JayJay. The should give you the years worth of info, but a lot of companies don't issue them until the close of the Inland Rev. tax year - April.

(I also say kill the b!tch )

[Gemma12nel 1]

When you have been employed the previous year, don't you automatically get set a P60 from the IR , therefore JayJay you should be sent one from last years employment?

[JayJay 4]

Ah yes, but goodness knows where it's going

[Hilarious Clinton 452]

You don't have to pay double taxes. You get a credit for what you paid in taxes in the UK. This credit is taken off your taxes here.

http://www.irs.gov/publications/p54/ch05.html#d0e5983

--------------------

Tax

Before you move abroad, you must inform the Inland Revenue, which will probably ask you to complete a P85 tax form so that the taxman can keep track of you. For more information on tax issues for non-residents, read the Inland Revenue’s series of international leaflets (http://www.hmrc.gov.uk/leaflets/c9.htm) or ring 0845 0700040.

In many countries you will have the option to either continue to pay taxes to the UK or register to pay taxes in your country of residence. To decide, speak to a local expert for an estimate of how much you will be charged in your new homeland.

If you keep investments in the UK, they will be taxed at source, while earnings from bank and building societies won’t be taxed – but only as long as you fill in a tax exemption form.

If you keep your house in the UK and rent it out, you will be liable for tax on amounts earned over £4,250 per tax year – but it is the responsibility of your tenants or your letting agent to make sure the tax is paid.

http://www.uknetguide.co.uk/Finance/Articl...ove_Abroad.html

http://www.hmrc.gov.uk/leaflets/c9.htm

[JayJay 4]

#######, I should have completed a P85 bloody ages ago then Awww never mind!