Tax question

[FinQuin 0]

Hey guys

 

My US wife is currently with me in the UK on a spousal visa - we’ll be hitting the 2 year mark in January next year.

 

We are looking to move to the US (so applying for my spousal visa as a UK citizen) in about a year.

 

I’ve started to gather information on what she will require to sponsor me and would love to get some more insight as we’re a little stuck. I’m aware that she will need to prove domicile which I think will be fine - she still has her family home that she receives letters to and also still has bank account that she uses monthly. She also still has insurance back home too.

 

The main missing piece for us is regarding taxes. Since she’s been in the UK, she has not filed any taxes back home. She does work on the UK for a UK based job and pays UK taxes however. Is this a cause for concern? 
 

Thank you for your advice in advance!

 

 

 

 

[payxibka 10,047]

12 minutes ago, FinQuin said:

Hey guys

 

My US wife is currently with me in the UK on a spousal visa - we’ll be hitting the 2 year mark in January next year.

 

We are looking to move to the US (so applying for my spousal visa as a UK citizen) in about a year.

 

I’ve started to gather information on what she will require to sponsor me and would love to get some more insight as we’re a little stuck. I’m aware that she will need to prove domicile which I think will be fine - she still has her family home that she receives letters to and also still has bank account that she uses monthly. She also still has insurance back home too.

 

The main missing piece for us is regarding taxes. Since she’s been in the UK, she has not filed any taxes back home. She does work on the UK for a UK based job and pays UK taxes however. Is this a cause for concern? 
 

Thank you for your advice in advance!

 

 

 

 

Yes.  US is interested in worldwide income.  She most likely has a filing responsibility,  may or may not have a tax liability 

[HRQX 4,145]

14 minutes ago, FinQuin said:

Since she’s been in the UK, she has not filed any taxes back home. She does work on the UK for a UK based job and pays UK taxes however. Is this a cause for concern?

She was still required to file US tax returns. Her US passport has a reminder:

[igoyougoduke 1,676]

18 minutes ago, FinQuin said:

Hey guys

 

My US wife is currently with me in the UK on a spousal visa - we’ll be hitting the 2 year mark in January next year.

 

We are looking to move to the US (so applying for my spousal visa as a UK citizen) in about a year.

 

I’ve started to gather information on what she will require to sponsor me and would love to get some more insight as we’re a little stuck. I’m aware that she will need to prove domicile which I think will be fine - she still has her family home that she receives letters to and also still has bank account that she uses monthly. She also still has insurance back home too.

 

The main missing piece for us is regarding taxes. Since she’s been in the UK, she has not filed any taxes back home. She does work on the UK for a UK based job and pays UK taxes however. Is this a cause for concern? 
 

Thank you for your advice in advance!

 

 

 

 

It is a concern due to her not filing taxes

[Lucky2Lucky 2,526]

As others have posted, yes, it is a concern as she is required to file taxes as a US citizen. She needs to start by filing back taxes for the years that she has not. Also - just a heads up it will take longer than a year for you to obtain a visa so don't plan on moving in about a year. 

[FinQuin 0]

33 minutes ago, Luckycuds said:

As others have posted, yes, it is a concern as she is required to file taxes as a US citizen. She needs to start by filing back taxes for the years that she has not. Also - just a heads up it will take longer than a year for you to obtain a visa so don't plan on moving in about a year. 

Ah, thank you for this explanation. We’re currently looking into backdating now. Do you know if the IRS still requires US citizens abroad (who are already paying taxes in the country they now reside in) to pay taxes back in America too? Sounds kinda crazy if that is the case. We’re trying to find information that supports this but not really finding anything.

 

Also, yes - totally aware of the application process and timelines. I meant we would

apply in a year

 

Thank you again!

[HRQX 4,145]

10 minutes ago, FinQuin said:

Do you know if the IRS still requires US citizens abroad (who are already paying taxes in the country they now reside in) to pay taxes back in America too?

The requirement is to file. In most cases, the tax due is $0 because of either the FEIE or Foreign Tax Credit:

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

https://www.irs.gov/forms-pubs/about-form-1116

 

Here's a summary: https://brighttax.com/blog/taxes-for-expats-the-united-states-us-united-kingdom-uk-tax-treaty/

Edited October 21, 2020 by HRQX

[pushbrk 13,176]

22 minutes ago, FinQuin said:

Ah, thank you for this explanation. We’re currently looking into backdating now. Do you know if the IRS still requires US citizens abroad (who are already paying taxes in the country they now reside in) to pay taxes back in America too? Sounds kinda crazy if that is the case. We’re trying to find information that supports this but not really finding anything.

 

Also, yes - totally aware of the application process and timelines. I meant we would

apply in a year

 

Thank you again!

The first approximately $100,000 (equivalent) of foreign income is exempt from US Federal Income Taxes.   You are not "backdating" anything.  She'll be filing tax returns for years she didn't file.  

[payxibka 10,047]

32 minutes ago, FinQuin said:

Ah, thank you for this explanation. We’re currently looking into backdating now. Do you know if the IRS still requires US citizens abroad (who are already paying taxes in the country they now reside in) to pay taxes back in America too? Sounds kinda crazy if that is the case. We’re trying to find information that supports this but not really finding anything.

 

Also, yes - totally aware of the application process and timelines. I meant we would

apply in a year

 

Thank you again!

Google is your friend 

[Lucky2Lucky 2,526]

1 hour ago, FinQuin said:

Ah, thank you for this explanation. We’re currently looking into backdating now. Do you know if the IRS still requires US citizens abroad (who are already paying taxes in the country they now reside in) to pay taxes back in America too? Sounds kinda crazy if that is the case. We’re trying to find information that supports this but not really finding anything.

 

Also, yes - totally aware of the application process and timelines. I meant we would

apply in a year

 

Thank you again!

Yes but it’s likely she did not make enough to actually have to pay the tax. Thanks for clarification on when you would apply- unfortunately things have drastically slowed down with covid. That’s good you are looking into what you have to do now though.

Edited October 21, 2020 by Luckycuds