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markandoliv

Turbotax is requiring that i upgrade to deluxe package to file taxes jointly?

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Hello to all, we are in the process of filing taxes jointly with my wife (USC). Im getting familiar with turbo tax, and when it asks if we have "made any money outside the US", upon answering "yes" as i worked in the UK before coming to the US on k1 in august 2019, it says i should upgrade to the deluxe package for 40 dollars. 

 

When i try to skip this it takes me back a page.  If i select no then it allows me to continue i to the section about foreign bank accounts etc

 

Has anyone else experienced this or have i done something wrong?  Or do i simply need to upgrade ?

 

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Having foreign income, foreign assets, and/or foreign bank accounts will trigger additional reporting and additional forms.....upgrade or seek help from a competent tax professional.


"The immigration process demands a great deal of knowledge, planning, time, patience, and money.  A deficit in any of these areas can spell heartbreak."

   -GB, "old man of much life experience"

 

Retired 20 year United States Air Force Missileer (Retired E-8)

Retired Registered Nurse with practice in Labor/Delivery, Home Health, Adolescent Psych, Adult Psych

Retired IT Professional, Software Developer, Database Manager

 

 

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One more thing......if you had foreign income (especially if you came to the US later in the year), you might benefit by filing as a dual status alien.....consult a competent tax professional.

 

Edit:  Dual status aliens must file separately.

Edited by missileman

"The immigration process demands a great deal of knowledge, planning, time, patience, and money.  A deficit in any of these areas can spell heartbreak."

   -GB, "old man of much life experience"

 

Retired 20 year United States Air Force Missileer (Retired E-8)

Retired Registered Nurse with practice in Labor/Delivery, Home Health, Adolescent Psych, Adult Psych

Retired IT Professional, Software Developer, Database Manager

 

 

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4 minutes ago, missileman said:

Having foreign income, foreign assets, and/or foreign bank accounts will trigger additional reporting and additional forms.....upgrade or seek help from a competent tax professional.

So as far as youre aware, its a requirement to upgrade turbotax if married filing jointly (assuming foreign spouse worked in home country before coming to US on k1)?

 

Just checking on here before i pay for it. 

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3 minutes ago, missileman said:

One more thing......if you had foreign income (especially if you came to the US later in the year), you might benefit by filing as a dual status alien.....consult a competent tax professional.

 

Edit:  Dual status aliens must file separately.

I came to the US on august 30th, not sure if that changes anything but ill look into the dual status alien

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1 minute ago, markandoliv said:

I came to the US on august 30th, not sure if that changes anything but ill look into the dual status alien

Well, as a dual status alien, you can report only US based income........depending on your foreign income, it might result in a lower tax liability.......and that is exactly what my wife and I did for the year she arrived.


"The immigration process demands a great deal of knowledge, planning, time, patience, and money.  A deficit in any of these areas can spell heartbreak."

   -GB, "old man of much life experience"

 

Retired 20 year United States Air Force Missileer (Retired E-8)

Retired Registered Nurse with practice in Labor/Delivery, Home Health, Adolescent Psych, Adult Psych

Retired IT Professional, Software Developer, Database Manager

 

 

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Filed: Citizen (apr) Country: Canada
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@markandoliv 

 

For the first time filing, I’d highly recommend consulting with a competent tax service (ie.  The ones that aren’t just open during the tax season).

 

We did for our 2016 taxes.  Was about $300, but money well spent to have it done correctly.

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2 minutes ago, missileman said:

Well, as a dual status alien, you can report only US based income........depending on your foreign income, it might result in a lower tax liability.......and that is exactly what my wife and I did for the year she arrived.

My income in the US is 0 and my foreign income for 2019 was around £8000.   We are looking into tax professionals, but been unable to find any, nesr where we live in north Carolina that mention any familiarity with immigration tax rules and that kind of thing. 

3 minutes ago, Cryssiekins said:

@markandoliv 

 

For the first time filing, I’d highly recommend consulting with a competent tax service (ie.  The ones that aren’t just open during the tax season).

 

We did for our 2016 taxes.  Was about $300, but money well spent to have it done correctly.

Currently in the process of trying to find one near where we live in NC

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Filed: AOS (apr) Country: Germany
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1 minute ago, Cryssiekins said:

@markandoliv 

 

For the first time filing, I’d highly recommend consulting with a competent tax service (ie.  The ones that aren’t just open during the tax season).

 

We did for our 2016 taxes.  Was about $300, but money well spent to have it done correctly.

I would recommend that too. We just tried to do it on our own last weekend and I absolutely don't feel comfortable with it cause there where a couple of things that weren't so easy to answer as the form wants it.

We ran into the same issue with TurboTax and even though we're able to exclude my income from the federal tax it didn't worked for the state taxes so PA suddenly would want a lot of money...

 

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I use TaxAct and the same situation applies, even trying to file a 8889 asks that I upgrade from the basic, (free) edition. to the 'plus'. Filing anything out of the ordinary such as 8938, 1116, 2555, will trigger a mandatory upgrade. I filed yesterday and, although I can't speak for Turbo Tax, i'm sure the 'interview' techniques used by TaxAct would be about the same as other preparation software. 

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I'm unaware of any free filing options that cover the FEIE. Some may exist, but the big names don't appear to offer it for free.

 

Run the numbers both ways and see what is better:

MFS as a dual status alien, reporting only income once living in the US

MFJ, reporting worldwide income. If you qualify for the FEIE, you can then exclude that foreign income (up to ~$100k).

 

MFJ usually works out better, but run both to confirm.


Timelines:

ROC:

Spoiler

7/27/20: Sent forms to Dallas lockbox, 7/30/20: Received by USCIS, 8/10 NOA1 electronic notification received, 8/1/ NOA1 hard copy received

AOS:

Spoiler

AOS (I-485 + I-131 + I-765):

9/25/17: sent forms to Chicago, 9/27/17: received by USCIS, 10/4/17: NOA1 electronic notification received, 10/10/17: NOA1 hard copy received. Social Security card being issued in married name (3rd attempt!)

10/14/17: Biometrics appointment notice received, 10/25/17: Biometrics

1/2/18: EAD + AP approved (no website update), 1/5/18: EAD + AP mailed, 1/8/18: EAD + AP approval notice hardcopies received, 1/10/18: EAD + AP received

9/5/18: Interview scheduled notice, 10/17/18: Interview

10/24/18: Green card produced notice, 10/25/18: Formal approval, 10/31/18: Green card received

K-1:

Spoiler

I-129F

12/1/16: sent, 12/14/16: NOA1 hard copy received, 3/10/17: RFE (IMB verification), 3/22/17: RFE response received

3/24/17: Approved! , 3/30/17: NOA2 hard copy received

 

NVC

4/6/2017: Received, 4/12/2017: Sent to Riyadh embassy, 4/16/2017: Case received at Riyadh embassy, 4/21/2017: Request case transfer to Manila, approved 4/24/2017

 

K-1

5/1/2017: Case received by Manila (1 week embassy transfer??? Lucky~)

7/13/2017: Interview: APPROVED!!!

7/19/2017: Visa in hand

8/15/2017: POE

 

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Filed: Citizen (apr) Country: England
Timeline
18 hours ago, markandoliv said:

Hello to all, we are in the process of filing taxes jointly with my wife (USC). Im getting familiar with turbo tax, and when it asks if we have "made any money outside the US", upon answering "yes" as i worked in the UK before coming to the US on k1 in august 2019, it says i should upgrade to the deluxe package for 40 dollars. 

 

When i try to skip this it takes me back a page.  If i select no then it allows me to continue i to the section about foreign bank accounts etc

 

Has anyone else experienced this or have i done something wrong?  Or do i simply need to upgrade ?

 

Thanks


My wife has used TurboTax for 18 consecutive years and highly recommends you use the desktop version. 
 

A lot of what they suggest is marketing to try to get you to spend more money. They make it seem like because we have some big financial investments and a self-employed situation we need the over $100 version. TurboTax Basic (lowest level) will have all the forms needed to handle all of the above plus foreign income. We buy Deluxe desktop version now because it is always on sale in January for the same price as Basic. 
 

HOWEVER...it sounds like you are trying to use the free online TurboTax. There’s a lot of hype to their free offer. In reality, they don’t offer much for free but a real simple return.  It is correct that the free online version will not handle your foreign income exclusion. So if you continue with online, you have to upgrade. 
 

Or you can go to Amazon and purchase the Deluxe software for $29 if you don’t have a state income tax, or $39 if you need your state software as well. With the software installed on a computer you can try as many “what if” versions you want by saving under different file names. You don’t have to modify your one online version to look at it a different way.

Edited by Wuozopo

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Filed: Citizen (apr) Country: England
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18 hours ago, Letspaintcookies said:

I would recommend that too. We just tried to do it on our own last weekend and I absolutely don't feel comfortable with it cause there where a couple of things that weren't so easy to answer as the form wants it.

We ran into the same issue with TurboTax and even though we're able to exclude my income from the federal tax it didn't worked for the state taxes so PA suddenly would want a lot of money...

 


Each state will have their own tax rules. Some states don’t tax money not earned in that state. For example TurboTax on an AZ state return will leave off the foreign income completely.  
 

Checking PA...

Is income earned in a foreign country taxable in my state, Pennsylvania? Yes. According to the PA Department of Revenue website: A tax treaty between the U.S. Government and a foreign country has no effect on Pennsylvania tax law.


That’s a good point to analyze if the benefit of the federal return is wiped out by the state return. Also does PA require one to file with the identical status as their federal or could the one spouse with AZ income file as MFS. 

 

Edited by Wuozopo

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1 hour ago, Wuozopo said:


Each state will have their own tax rules. Some states don’t tax money not earned in that state. For example TurboTax on an AZ state return will leave off the foreign income completely.  
 

Checking PA...

Is income earned in a foreign country taxable in my state, Pennsylvania? Yes. According to the PA Department of Revenue website: A tax treaty between the U.S. Government and a foreign country has no effect on Pennsylvania tax law.


That’s a good point to analyze if the benefit of the federal return is wiped out by the state return. Also does PA require one to file with the identical status as their federal or could the one spouse with AZ income file as MFS. 

 

To add to this...

You would file as a part-year resident if you moved mid-year. Then you only need to claim income (worldwide, as noted) earned from the moment you became a PA resident.

https://www.doreservices.state.pa.us/eServices/padirect/pa40_partA.htm

Quote

Residency Status
(R) Resident

  • If you were a resident of Pennsylvania for all of 2019, select this option.

(N) Nonresident

  • If you were a nonresident of Pennsylvania for all of 2019, select this option.
  • As a nonresident, intangible income is reported to your home state.
  • PA law taxes nonresidents on the income earned, received, or realized from PA sources during 2019.

(P) Part-Year Resident

  • If you lived in Pennsylvania for only part of 2019, select this option.
  • PA law taxes part-year residents on all income from all sources while a PA resident, and
  • Then on the income earned, received, and realized from PA sources while a nonresident.

 

Edit: Also, was this a question or statement?

"Also does PA require one to file with the identical status as their federal or could the one spouse with AZ income file as MFS."

Edited by geowrian

Timelines:

ROC:

Spoiler

7/27/20: Sent forms to Dallas lockbox, 7/30/20: Received by USCIS, 8/10 NOA1 electronic notification received, 8/1/ NOA1 hard copy received

AOS:

Spoiler

AOS (I-485 + I-131 + I-765):

9/25/17: sent forms to Chicago, 9/27/17: received by USCIS, 10/4/17: NOA1 electronic notification received, 10/10/17: NOA1 hard copy received. Social Security card being issued in married name (3rd attempt!)

10/14/17: Biometrics appointment notice received, 10/25/17: Biometrics

1/2/18: EAD + AP approved (no website update), 1/5/18: EAD + AP mailed, 1/8/18: EAD + AP approval notice hardcopies received, 1/10/18: EAD + AP received

9/5/18: Interview scheduled notice, 10/17/18: Interview

10/24/18: Green card produced notice, 10/25/18: Formal approval, 10/31/18: Green card received

K-1:

Spoiler

I-129F

12/1/16: sent, 12/14/16: NOA1 hard copy received, 3/10/17: RFE (IMB verification), 3/22/17: RFE response received

3/24/17: Approved! , 3/30/17: NOA2 hard copy received

 

NVC

4/6/2017: Received, 4/12/2017: Sent to Riyadh embassy, 4/16/2017: Case received at Riyadh embassy, 4/21/2017: Request case transfer to Manila, approved 4/24/2017

 

K-1

5/1/2017: Case received by Manila (1 week embassy transfer??? Lucky~)

7/13/2017: Interview: APPROVED!!!

7/19/2017: Visa in hand

8/15/2017: POE

 

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Filed: Citizen (apr) Country: England
Timeline
21 minutes ago, geowrian said:

 

 

Edit: Also, was this a question or statement?

"Also does PA require one to file with the identical status as their federal or could the one spouse with AZ income file as MFS."

It was a question for the PA resident look into if interested in options and a bad typo as well. I’m not that interested in State income tax since I don’t have one so not looking it up. And I meant to say AZ allows different status filing for fed and state. Not sure what other states require. 

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