2009 Tax Returns

[Thai family 0]

I think this is to determine if the income earned at M&S can be excluded from US taxes. It can, but answering the questions does get confusing. Right now I think you answer the questions as if he were at M&S all year and don't get muddled by his future intentions. Yes he was a bonafide resident of the UK and paid taxes to the UK. I think somewhere along the line you put a date his bonafide residency ended which is June.

What they are working toward is say he earned US equivalent dollars of $10,000 at M&S and paid taxes while he was a bonafide resident of the UK. He was bonafide resident because he had a residency there, is a UK citizen, and he lived there 330 days of the 12 months prior to June 08. He has to be a bonafide resident to exclude the M&S $10k.

These laws and questions get complicated because the same thing would be asked of a US citizen who might have been on assignment in the UK. So they have to establish if that USC really lived in the UK or was just there 3 months, more like a temp visitor. That's why the questions to determine if a person is a bonafide resident. For your husband, he was a real bonafide resident of the UK.

Thanks for your help!

I don't remember exactly how it went when I was doing the online TurboTax and I didn't register or save it. I still havent bought a copy or started my real return. BUT I think where you are now is the drill down part to determine if he is able to exclude the UK income. So you say yes he was bonafide, but they keep asking questions to make sure he meets all the requirements. A person could claim to have lived and worked in the UK with a residence, but he didn't pay taxes to the UK because he was getting paid by an American company. Aha, they say...then you can't deduct those earnings. Very complicated because it tries to fit too many scenarios onto one form.

I think I worked it out...I agree they are fitting too many scenarios into one form. Then again I imagine it is difficult to cover all scenarios on their end, although this is likely relatively common. I felt some of the questions were ambiguous..such as the income tax question. To me the way it was worded seemed like they were asking if he has ever income tax in the UK....but what they seem to be getting at is "is he still paying income tax in the UK."

I look forward to next years taxes...they should be a breeze compared to this year!

The intent of the law is to avoid double taxation, in accord with the tax treaties we have with a number of countries. If he was a resident of the UK and paid taxes on the income he earned there to the UK, then he shouldn't have to pay it to the US too. We are in the same boat.

Thai Mom

[Anh map 2,098]

If you have a SSN then you can file "normally."

You are married, so you file married.

[Nich-Nick 3,354]

If you have a SSN then you can file "normally."

You are married, so you file married.

A social security number does not make you "normal." Your first year in the country is more complicated. You are either a resident alien or nonresident alien. Nonresident aliens can't file joint with a USC. They have a special return 1040NR (for nonresident). This thread is about ways to know if you can be a resident alien and file joint. And any joint return must show all the income both people made during the year, even if it was earned in another country. That foreign money can normally be deducted so it isn't taxed.

[BTalley 0]

Nichole, you were right.

Ask 3 experts, get 3 different responses.

I called an IRS representative, and she said Svetlana does qualify for Foreign Income Exclusion.

My local H&R Block expert says she doesn't qualify. He said that "resident alien for tax purposes" means you can file jointly but doesn't make her a resident alien who can use the exclusion.

My sister-in-law --- also an H&R Block representative --- first said she didn't qualify, then checked with the tax research institute, and then said she did qualify.

Before hearing back from my sister-in-law, I played it safe and sent in my return without taking the exclusion.

But now I am going to send a copy of my return to my sister-in-law, and she will send in a 1040X (amended return) to the IRS.

Can this tax code get any more complicated?

[Nich-Nick 3,354]

Well good. I hope you get a nice chunk off your taxes with the 1040X. And tell her don't forget that Svetlana should qualify for the $600 Recovery Rebate credit since you're filing status is different this year. Not a check this year, but taken off your tax liability. And if you didn't get the whole $600 last year, you may be able to "recover" the difference. The tax programs asks how much you got, so have that info for the new return if you didn't on the first.

Yes the tax laws are complicated. You have to read mountains of Publications to grab a bit of useful info from each to put together your specific case. Thank God for TurboTax. The programmers must be brilliant to translate it all into code to create the software. A bargain at $29.99 in my opinion.

And you know what gets me?? Here we are struggling over maybe a thousand dollars one way or the other and trying our best to get it right...then there are those Washington politicians in high places that don't even pay their taxes that have come to light in recent weeks. Sheeez!!