Income Tax filing newly married

[Slightly Bonkers 0]

Oh ye the tax-wise....

Not immigration related but ...

Is there any 'catch' to the first time home-owners tax credit? I understand its an interest free loan over 15 years and capped at 7500. I understand if we sell, the amount is due immediately? We were going to take it, pay it off our mortgage principal and then just pay it back over the next 15 years. Are we missing anything?

[Nich-Nick 3,354]

I was going down the posts but got impatient so I figured I would just ask......How long do we have to file taxes? I am wondering if it is more worth it to wait until he gets his SS# (which should be soon since my husband did his biometrics for EAD a couple weeks ago).

The deadline is April 15. If you get it postmarked on that day, it's on time. Some city big post offices make a big deal of it and stay open until midnight and have drive through mailings for last minute filers. But don't count on that.

Edited February 12, 2009 by Nich-Nick

[himher 634]

We had this problem last year. I consulted with the tax specialists at the IRS, this is what we were instructed to do:

If we OWE money, file an extension which gives an Oct 15th deadline to file

If we are OWED money (a refund), file anytime before Oct 15th, no extension required

We filed married/jointly, waited for the SS card (arrived mid-May) and e-filed a month late. We got our refund within 2 weeks and got our stimulus payment a few days later. There was no penalty or issue for us because we filed late.

If you file married and jointly, you have to declare worldwide income. Whether there is an opinion as to the business of the US government on foreign earned income is not material at all to the rules and requirements of filing taxes. (that wasn't addressed to you but to an earlier post). In our case, since my wife worked in her home country and never stepped foot on US soil for all of 2007, we declared her as a resident for 2007 (2008 tax season) but she met the "physical presence" test for the foreign earned income exclusion for 2007 aka was outside of the US for >330 days. So we declared her income then turned around and excluded it so it didnt affect our taxes or taxable income at all.

Filing status does not have to change to get the 2007 rebate paid in 2008. I have a child that I claim every other year. I did not claim her last year. Because she was declared as a dependent this year, we got an additional rebate even though my wife and I filed married/jointly just like we did last year. It is not filing status that has to change, the correction is done if there are any changes in dependents for the 2008 tax year.

I was going down the posts but got impatient so I figured I would just ask......How long do we have to file taxes? I am wondering if it is more worth it to wait until he gets his SS# (which should be soon since my husband did his biometrics for EAD a couple weeks ago).

The deadline is April 15. If you get it postmarked on that day, it's on time. Some city big post offices make a big deal of it and stay open until midnight and have drive through mailings for last minute filers. But don't count on that.

[tom&tata 2]

Oh ye the tax-wise....

Not immigration related but ...

Is there any 'catch' to the first time home-owners tax credit? I understand its an interest free loan over 15 years and capped at 7500. I understand if we sell, the amount is due immediately? We were going to take it, pay it off our mortgage principal and then just pay it back over the next 15 years. Are we missing anything?

http://www.irs.gov/taxtopics/tc611.html

You pretty much cover everything except it is not payable to the gov't if certain conditions are met.

[HighwayStar 0]

I was just re-reading through the earlier posts in order to have everything clear before we file jointly, and a doubt came into my mind... sorry if it's a dumb question. When reporting my foreign income, should I refer to my gross income, or the net one? As an gov't worker in Italy my taxes were already deducted from my paycheck, though my pay stubs show both the gross and the net figures for each month. Since I was paid until the end of 2008, I suppose I should use the Euro/dollar conversion rate for December 2008 - or not?

[tom&tata 2]

I was just re-reading through the earlier posts in order to have everything clear before we file jointly, and a doubt came into my mind... sorry if it's a dumb question. When reporting my foreign income, should I refer to my gross income, or the net one? As an gov't worker in Italy my taxes were already deducted from my paycheck, though my pay stubs show both the gross and the net figures for each month. Since I was paid until the end of 2008, I suppose I should use the Euro/dollar conversion rate for December 2008 - or not?

I would say gross income. In my last job abroad, my salary & cash benefit was always quoted in net after tax. The company pays the tax for me & report the grossed-up amount to the local tax authority as the salary.

[Nich-Nick 3,354]

Highway star~~

It's gross. The exchange rate is supposed to be applied when earned. Well that was all year so you could work it out by month or use the website http://www.oanda.com/convert/fxhistory to get the average for a range of dates. Or you could just come up with your own reasonable amount because nobody is likely to analyze it that carefully.

Love~~ You husband has to come up with his own figures from pay slips or something to get any money he earned in 2008. He doesn't have to submit any proof to the IRS. He just puts down a figure converted to US dollars and fills out a substiture W2 for it. There's some explanation on that earlier, but I'm too lazy to look up the actual form number, so scroll back a few pages.

If the tax return is audited by the IRS, then they could ask to see where he came up with his numbers, so best to make some kind of notes to save with your tax files. Then if you were audited, you would have something to say besides...."Duh??!? I have no clue." We made a little calculation paper and the exchange rate we used so in case we had to remember, we'd have notes.

Himher: So did you double dip? The ex claimed $300 for the child in 2007, then you claimed $300 for the same child in 2008. Not doubting you, just curious how it works since I have no children and never read that part.

[sarah&rob 1]

Nich-Nick, for the Form 4852, line 4 it says "I have been unable to obtain Form W-2. I have notified the IRS of this fact. The amounts on Line 7 or Line 8 are my best estimates" blah blah....

Do we have to notify the IRS that my husband doesn't have a W-2 for his UK income prior to filing? Or do we just send in the paperwork

[himher 634]

I don't remember that this was difficult at all. We entered it as foreign earned income under "other types of income" in Turbotax. Turbotax added the dollar amount it to the gross then under "other income" put "form 2555" and subtracted it right back out. We downloaded the currency exchange rates into Excel, and converted the gross payments from the salary slips into dollars at whatever the exchange rate was for the day of payment and that is how we came up with the dollar amount in the first place. As (her) gross was under the allowable exclusion, we did not worry about tax payments in other country, cost of second residence, and all of the other corrections that can be made on the foreign earned income worksheet. Since we e-filed all we had to send in was the signed declaration of choice to be treated a permanent resident and the other form that had to be signed by both of us in place of the tax return (this year somehow we e-signed?) There was no notification, no substitute W2, and no other paperwork we had to file. Just a straight reporting of her income on the foreign earned income and exclusion sheet.

For records we saved the salary slips, website name, website download, and of course a copy of the return.

Nich-Nick, for the Form 4852, line 4 it says "I have been unable to obtain Form W-2. I have notified the IRS of this fact. The amounts on Line 7 or Line 8 are my best estimates" blah blah....

Do we have to notify the IRS that my husband doesn't have a W-2 for his UK income prior to filing? Or do we just send in the paperwork

[veronicavonn 7]

So it IS possible to E-FILE when newly married?

I would just need to send the additional declaration letter (and whatever form I need to find that we both sign) to the Tax Office in the Frankfurt, Germany location, from my husband saying that he would like to be treated as a permanent resident?

[tom&tata 2]

So it IS possible to E-FILE when newly married?

I would just need to send the additional declaration letter (and whatever form I need to find that we both sign) to the Tax Office in the Frankfurt, Germany location, from my husband saying that he would like to be treated as a permanent resident?

Does the foreign spouse has SSN or ITIN?

[veronicavonn 7]

That's the part that I am getting to right now..

After reading this thread over and over (at least 5 times now) and reading publications on irs.gov, I need to get him an ITIN it appears.

*grrr.*

How long does it take to get one assigned?

Also, I have used www.freetaxusa.com for the past 3 years, and that website I am not able to use this year because it does not support foreign addresses and foreign earned income. *double grrrr.*

I've taken the suggestions of other VJ's and I'm trying out the free TurboTax at the moment..

Edited February 13, 2009 by veronicavonn

[Nich-Nick 3,354]

Nich-Nick, for the Form 4852, line 4 it says "I have been unable to obtain Form W-2. I have notified the IRS of this fact. The amounts on Line 7 or Line 8 are my best estimates" blah blah....

Do we have to notify the IRS that my husband doesn't have a W-2 for his UK income prior to filing? Or do we just send in the paperwork

I just attached that to the front of the return with my W2. I didn't notify the IRS. The form is mostly for Americans whose employers didn't give them a W2 so maybe they would notify IRS and the IRS would come down on the employer for violating the law. I don't think that would apply to you.

[Nich-Nick 3,354]

I don't remember that this was difficult at all. We entered it as foreign earned income under "other types of income" in Turbotax. Turbotax added the dollar amount it to the gross then under "other income" put "form 2555" and subtracted it right back out.

I did that first on TT and it took off the foreign income but didn't show it in gross on line 7. So I was getting a HUGE refund because it was deducting his exclusion from only my wages. I knew that was wrong, so found the substitute W2 form 4852 to get it into line 7. Somebody else reported the same thing. Logically I thought if I told TurboTax about the "other" income foreign wages, it would do the rest to get it in the gross. Maybe 2008 TurboTax is quirky on that part. I dunno. Since the substitute W2 has places to say it is foreign income and from a foreign address, I think it was a proper way to report the amount.

[Nich-Nick 3,354]

Maybe you can e-file and send the signed statement separately. I didn't research it. I just chose to paper file and have everything together. Not in a huge hurry to get my refund. Direct deposit wll speed it up a little over asking for a refund check. This is the first year I've gotten a refund in ages. I usually write them a big fat check when I file. (No kids, no mortgage, investment income = owing more than withheld) I'm just so happy about the refund that I can wait a month.