Filing our first Tax's after K1

[JennyR 11]

Hey Everone looking for some help.

 

We are about to file our tax's for 2019, our understanding is My husband (from the UK) who came here on the 1st of Aug 2019 can file as if he were here for the entire tax year and use his income to give us roughly $10,400 off my taxable income is this correct?

 

We married in OCT and the change of status / work permint / advanced parole were submitted in NOV (Not sure if this makes a diffrence)

 

I have my W2 and he has his P45 from his old Job in the UK Showing his earnings.

 

I plan on using TaxAct and im sure there is more to it but would be great if someone knows or has experience in how best to file 

[Wuozopo 4,285]

Start reading some of the recent threads where the question has been answered or discussed. He does not need his P45. He needs to know how much he earned between Jan 1 and the last UK paycheck. It is self reported with no W2 equivalent paperwork/proof required. (Seems crazy after all the documentation you have gotten used to for immigration, but it’s true.) Then convert it to US $$$.

[JennyR 11]

Totaly respect that and believe me we have been reading through allot of the forum and google. We are still stuck in as much as filling out the 2555 through Tax Act from Jan to Aug his foreign income is only $23000 we just cant work out if its taking the form into concideration or not and how to make sure he passes one or both the tests to exclude the earnings.

 

The weird thing was if we put his presence at 365 the federal tax jumped and additonal 1K and around the same for state which cant be right as that would be giving tax back from his UK earnings im guesing 

[Wuozopo 4,285]

9 hours ago, JennyR said:

Totaly respect that and believe me we have been reading through allot of the forum and google. We are still stuck in as much as filling out the 2555 through Tax Act from Jan to Aug his foreign income is only $23000 we just cant work out if its taking the form into concideration or not and how to make sure he passes one or both the tests to exclude the earnings.

 

The weird thing was if we put his presence at 365 the federal tax jumped and additonal 1K and around the same for state which cant be right as that would be giving tax back from his UK earnings im guesing 

I haven’t used TaxAct so can’t visualise their process or questions to get you where you’re going. I know how TurboTax desktop installed cd gets through foreign earned income. 
 

If he is a UK born citizen, then his residence for the bonafide resident test began on the date of his birth.

He did not spend 365 days of 2019 in the UK. His number should be somewhere around 210 days, but it doesn’t change his exclusion. They calculate a percentage of the maximum exclusion available to him based on the number of days. Just as an example in round numbers, if the max allowed is $100k and he only spent half the year in the UK, then the max for him is half the $100k or $50k. He’s still under that amount so all his qualifies. 
 

I’m not quite following  the jump of $1000. What is before scenario and what did you change?
 

 

[JennyR 11]

Thankyou so much for the reply, 

 

So if we put his Bonafide start date as Birth and his end date the day he moved here which is what we did from your advise on another thread that should be good

 

With the days spend in 2019 should we be including a 2 week trip he had here to see me as well or leave that out to less complicate it. So from the 1st of Jan 2019 to 1st of Aug 2019 is 213 days in the UK (Excluding his 2 week trip here)

 

Theses are a few of the quitions i worry we are putting in wrong :

 

- Foreign Earned Income - Tax Home Information

Enter the address of your tax home and the date the home was established.

(This will be the UK and from Birth date I assume)

 

- Foreign Earned Income - Bona Fide Test - Dates

Enter the date that your period of bona fide residence began and the date it ended.

Date began

06/26/1980

Date ended

08/01/2019

If your bona fide residence has not ended, check here.

(Think this is correct but unsure if we need to check the box)

 

- Foreign Earned Income - Exclusion - Qualifying Days

Enter the number of days in your qualifying period that fall within your 2019 tax year.

 

(This seems to be the one that addjust the Federal and state refund for some reason and the bit that is concerning us if I put the days at 213 we get a bigger refund on both Federal and State which worries me and makes me think its thinking my husband is a US citizen working abroad and getting a tax refund it changes by $1200 for fed and $600 for state)

 

Were just worried this is incorrect and could land us in trouble with the IRS

 

Once again really appreciate the help we even went into an H&R block but they really didnt seem to understand, and considering the rest of the tax is complete just need to get this form 2555 right we didnt want to go through them

 

Edited January 27, 2020 by JennyR

[Wuozopo 4,285]

41 minutes ago, JennyR said:

With the days spend in 2019 should we be including a 2 week trip he had here to see me as well or leave that out to less complicate it. So from the 1st of Jan 2019 to 1st of Aug 2019 is 213 days in the UK (Excluding his 2 week trip here)

He didn’t give up his bonafide residence in the UK on that holiday trip. Doesn’t Tax Act automatically calculate the days and enter them on the form? He doesn’t exclude those days from his residence. And those days would not actually change his allowed exclusion anyway.

 

Still not following your description. And not quite understanding how H&R doing your taxes ties to this. If you use Form 2555, then it integrates throughout your whole return on several forms and the tax is figured differently, not straight off the tax tables. Form 2555 is not just an add on to a return prepared differently.
 

Questions about the H&R return:

1. Did they file it electronically for you already?
2. What filing status? Married Filing Separately or Joint
3. Did they include his foreign earned $23,000 on Form 1040 Line 1 added to your wages to show all income earned? Line 1 would be [your wages] + [his $23,000] 

 

 

 

Edited January 27, 2020 by Wuozopo

[JennyR 11]

Sorry if I confused things.

 

TaxAct doesn’t appear to automatically do any of this.

 

As we were worried the figure kept changing by so much, we went to see if H&R were of any help and they didn’t see to understand his situation as they stated he wouldn’t be able to get pass either of the 2 tests which we knew wasn’t true. so we didn’t want to place any faith in that at all so we went back to doing it online as realistically It’s all done apart from this foreign earned income.

 

Nothing is filed yet

We are filing married jointly as we were under the understanding this was the best way

When filling out online we are including his $23000 there has so far been no prompt for Form 1040

[JennyR 11]

By the looks of it it fills ou the 1040 by answering the questions for the 2555 should we be ticking that box for If your bona fide residence has not ended, check here. and keep the dates as from birth to the day he moved over maybe thats causing an issue

[JennyR 11]

For some reason it apears to be taking $23000 of my earnings rather than adding them and excluding them

[panamerican 35]

I don't know if this helps, but we are in an identical situation and our tax refund jumped by quite a bit after completing the 2555 through H&R Block online. However, I am still confirming things and have not filed. We went to an H&R Block office last week and the woman there knew about our situation and said we just need to complete 2555 properly and report her income (she has no investment income or anything else)

 

She entered on K1 in September 2019, married October, has SSN, and we filed AOS and EAD, but no response on either. No US income in 2019. She worked from January to August in 2019 in her home country where she was born. We are filing MFJ and RA for tax purposes. Her income last year totaled ~$7300. She passes the physical presence test for the 2555.

 

Only thing I'm confused about is if we still need to file by paper and mail in the letter stating we are filing as RA for her or if it is somehow implied by the H&R Block stuff online. The woman at the H&R Block office was pretty confident that all we would need is to complete that and we are good.

 

Let me know how your situation works out OP.

[JennyR 11]

Thankyou pretty much the same situation nice to know were not the only ones

 

Ive got a little further with this today my Husband has been playing around with it online through Tax Act.

 

The reason for the jump was we needed to enter foreign income with the Form 1040 FEC - Foreign Employer Compensation and Pensions prior to the 2555 thus the 2555 then waiving it with the Physical presence or bona fide test

 

Without the above it took my husbands earnings off mine which was not correct

 

The only issue we have now seems to be it has taken into account some of his earnings somewhere and taken around $400 away so this is our next step and reviewing it all

 

I think its possibly the Foreign Earned Income Tax - Itemized Deductions or Exclusions (which i think maybe the same figure as his income as that puts my tax back to where it should be)

 

We still have a little way to go just to make sure its correct.

[panamerican 35]

9 minutes ago, JennyR said:

Thankyou pretty much the same situation nice to know were not the only ones

 

Ive got a little further with this today my Husband has been playing around with it online through Tax Act.

 

The reason for the jump was we needed to enter foreign income with the Form 1040 FEC - Foreign Employer Compensation and Pensions prior to the 2555 thus the 2555 then waiving it with the Physical presence or bona fide test

 

Without the above it took my husbands earnings off mine which was not correct

 

The only issue we have now seems to be it has taken into account some of his earnings somewhere and taken around $400 away so this is our next step and reviewing it all

 

I think its possibly the Foreign Earned Income Tax - Itemized Deductions or Exclusions (which i think maybe the same figure as his income as that puts my tax back to where it should be)

 

We still have a little way to go just to make sure its correct.

Looks like we figured this out simultaneously. H&R Block online stopped me from proceeding stating I never entered the foreign income. I fixed that and the magical bump in refund went away; sad, but it makes more sense since it was seemingly going against nothing. I think we are ready to file at this point, although I am still not sure about including this letter stating we are filing as RA for her. I've seen that floating around these forums.

[JennyR 11]

22 hours ago, panamerican said:

Looks like we figured this out simultaneously. H&R Block online stopped me from proceeding stating I never entered the foreign income. I fixed that and the magical bump in refund went away; sad, but it makes more sense since it was seemingly going against nothing. I think we are ready to file at this point, although I am still not sure about including this letter stating we are filing as RA for her. I've seen that floating around these forums.

Looks that way Im still not going to push the button just yet and also think the state Tax is incorrect as its done a similar thing of take the UK wages off my earnings so think thats also wrong

[Wuozopo 4,285]

Coming back to this thread

 

All the income earned worldwide has to appear on Form 1040 Line 1.

That means the USCs income + the foreign earned income.

If it’s not there, then any potential refund you think you are getting is false hope. The entire return is not accurate until Line 1 is accurate.

 

How to get the tax program to put it there depends on how each brand wrote their software.

TurboTax has it at the end of asking about W2 income, and all the rest of income sources. They have a section called “Less Common Income” and that’s where they ask about any foreign income. You say yes and it pops it into Line 1.

 

If I remember H&R software, they want you to create a pseudo W2 for the foreign income. It’s nothing but a fake W2 for their programming to know to put it in Line 1. Anything on a W2 tells their software to add that amount to Line 1, even if it’s not a real W2. It gets the right number on Line 1. 
 

If you were doing it old school by hand with a blank form 1040, a pencil, and the instructions, you would just add his and hers together with a calculator and write it on Line 1. 
 

You have to report the foreign income first on Line 1 before you can subtract it on Line 7a. 

[markandoliv 3]

On 1/23/2020 at 2:30 PM, JennyR said:

Hey Everone looking for some help.

 

We are about to file our tax's for 2019, our understanding is My husband (from the UK) who came here on the 1st of Aug 2019 can file as if he were here for the entire tax year and use his income to give us roughly $10,400 off my taxable income is this correct?

 

We married in OCT and the change of status / work permint / advanced parole were submitted in NOV (Not sure if this makes a diffrence)

 

I have my W2 and he has his P45 from his old Job in the UK Showing his earnings.

 

I plan on using TaxAct and im sure there is more to it but would be great if someone knows or has experience in how best to file 

Hi, did you have to pay to upgrade from basic taxact so that they could help with the 2555 form?  Thanks