US taxes after abandoning green card/LPR - impact on USC

[Zeffe 2]

Hi everyone,

Thanks in advance for any advice. Here's our situation: My husband got his green card in 2013 (I'm a USC), but we've continued to live in the UK since then and have decided to formally abandon his GC (form I-407) because we do not intend to live permanently in the US at this time. I understand that my husband needs to file tax returns as an alien resident for every year he's had his green card. So he'll do that for 2013 and 2014. But after that, if we are not living in the US and he no longer has his GC, it is my understanding that he no longer needs to file tax returns with the IRS.

With this in mind, I am concerned about what impact his GC abandonment will have on my own US tax returns. As a USC, I file taxes with the IRS every year and for the 2013 returns I'll file them as "married, filing separately." The tax return form (e.g. form 1040) asks for my husband's name and social security number. Fine. I plan to list that info on my returns. But after he abandons his green card (and sends his SSN card back to the Social Security Administration), what do I do in future years? Do I keep listing my husband's SSN even though he has abandoned his SSN and green card? Or, do I list his SSN as "n/a"? Would that be a red flag for the IRS? Very confused.

A million thanks for your advice.

Zeffe

[Caryh 5,206]

You cannot abandon a SSN. He can give up the green card, but the SSN will always be his. Should he return even 30 years later and get a new green card, he will still have the same SSN.

[JohnR! 5,495]

In addition to the above, even though he may abandon his GC you can still file joint US taxes for as long as you are married - MFJ - in which case you will need to declare his income in GB as well. In some cases it makes sense to do so and take advantage of the better tax bracket. It is something you may wish to explore.

[Zeffe 2]

Thanks, Caryh. What does this mean for my tax filings going forward? Will I always need to list my husband's SSN on my returns, even if he's no longer a green card holder and no longer obliged to file with the IRS?

[Zeffe 2]

In addition to the above, even though he may abandon his GC you can still file joint US taxes for as long as you are married - MFJ - in which case you will need to declare his income in GB as well. In some cases it makes sense to do so and take advantage of the better tax bracket. It is something you may wish to explore.

Thanks, Gegel! So just to confirm, I will always need to list my spouse's SSN on my US tax returns so long as we are married and regardless of his GC status?

I had thought the MFJ option was only available to spouses who both have US citizenship and/or green cards/LPR status. Is this wrong? Is it possible to file jointly with the IRS even if my spouse is not a US resident and does not have US citizenship?

And a bigger can of worms: when is it advantageous to file jointly vs separately? Sorry, I know that's a difficult question! Thanks again.

[JohnR! 5,495]

Thanks, Caryh. What does this mean for my tax filings going forward? Will I always need to list my husband's SSN on my returns, even if he's no longer a green card holder and no longer obliged to file with the IRS?

You will have to list him in your tax return since your status will be MFS or MFJ, and in both cases you will need to disclose his information. The only difference is that under MFS his income will not be considered for the purpose of US taxes. If you file MFJ you will need to include his income as well.

Have a look at the tax treaty between the US and GB --> http://www.irs.gov/Businesses/International-Businesses/United-Kingdom-%28UK%29---Tax-Treaty-Documents

I hope this helps.

[Caryh 5,206]

Thanks, Caryh. What does this mean for my tax filings going forward? Will I always need to list my husband's SSN on my returns, even if he's no longer a green card holder and no longer obliged to file with the IRS?

As long as you're married to him. He's no longer liable for USA taxes, but you as a citizen will continue to need to file USA taxes. Your status will continue to be married. The best way of filing your taxes is going to depend on tax reciprocity with where you live and the USA, and all the other tax rules. Its probably gonna be complicated from here on out, and you'll want to discuss this with a competent tax accountant or attorney, at least to get an initial understanding of what's best for you. Unless you give up citizenship, the USA requires you to file your taxes. I've heard because of new banking regulations, many Americans in Europe are giving up citizenship, because the banks don't want the reporting headaches caused by the new USA laws and are refusing to give bank accounts to US citizens.

[JohnR! 5,495]

Thanks, Gegel! So just to confirm, I will always need to list my spouse's SSN on my US tax returns so long as we are married and regardless of his GC status?

I had thought the MFJ option was only available to spouses who both have US citizenship and/or green cards/LPR status. Is this wrong? Is it possible to file jointly with the IRS even if my spouse is not a US resident and does not have US citizenship?

And a bigger can of worms: when is it advantageous to file jointly vs separately? Sorry, I know that's a difficult question! Thanks again.

Correct. You will always list him because he is your husband - duh! - and because he has a SSN. It will also help him tremendously if you ever decide to move back stateside.

The MFJ option is available to non-resident spouses as well, that is not an issue. What may be an issue is determining whether it is financially advantageous to do so and the only way you can find the answer to that is by taking a look at the link I sent you - have some strong coffee nearby... - and come tax time you may call upon the US consulate/embassy IRS rep: ---> http://london.usembassy.gov/irs/%C2'>

Of course, as with everything else tax-wise, the more you know the more you want to jump out of a window....

[Zeffe 2]

If you file MFJ you will need to include his income as well.

Have a look at the tax treaty between the US and GB --> http://www.irs.gov/Businesses/International-Businesses/United-Kingdom-%28UK%29---Tax-Treaty-Documents

I hope this helps.

This helps enormously. But WOW, I am shocked that I'd need to include his income (for the MFJ option) if he is not a LPR or USC. Seems like a bit of an overreach by the US Treasury!

[Zeffe 2]

Of course, as with everything else tax-wise, the more you know the more you want to jump out of a window....

So true. If only we'd known before just how unfriendly the US tax code is toward globally mobile people...

[Caryh 5,206]

Of course, as with everything else tax-wise, the more you know the more you want to jump out of a window....

So true +1

[Zeffe 2]

As long as you're married to him. He's no longer liable for USA taxes, but you as a citizen will continue to need to file USA taxes. Your status will continue to be married. The best way of filing your taxes is going to depend on tax reciprocity with where you live and the USA, and all the other tax rules. Its probably gonna be complicated from here on out, and you'll want to discuss this with a competent tax accountant or attorney, at least to get an initial understanding of what's best for you. Unless you give up citizenship, the USA requires you to file your taxes. I've heard because of new banking regulations, many Americans in Europe are giving up citizenship, because the banks don't want the reporting headaches caused by the new USA laws and are refusing to give bank accounts to US citizens.

What a headache. Definitely time to find a competent tax specialist. Any thoughts on whether it's best to go with an accountant or attorney?

[Caryh 5,206]

This helps enormously. But WOW, I am shocked that I'd need to include his income (for the MFJ option) if he is not a LPR or USC. Seems like a bit of an overreach by the US Treasury!

Edited February 25, 2014 by Caryh

[JohnR! 5,495]

This helps enormously. But WOW, I am shocked that I'd need to include his income (for the MFJ option) if he is not a LPR or USC. Seems like a bit of an overreach by the US Treasury!

It all depends on the reciprocity agreements. For instance, it would work to your advantage if your spouse did not have a job in which case you would benefit from the better tax bracket for MFJ status. However, you may find out that once you work out your taxes with the Inland Rev Svc the taxable US amount be such that you would be exempt from filing or would have a small return or refund. Keep in mind that depending on your situation you will not be taxed for your entire overseas income.

[JohnR! 5,495]

What a headache. Definitely time to find a competent tax specialist. Any thoughts on whether it's best to go with an accountant or attorney?

My suggestion: If you have the time, do some homework of your own. Peruse the material available online first so you can gauge how much understanding you have. Then contact the IRS embassy office in London and ask if they can refer you to an accountant. Normally these are certified and bonded. Also, consider checking with HR in your company if they have any such type of assistance for expats. Many companies do.