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-   -   To file or not to file a US tax return... (https://www.englishforum.ch/general-off-topic/140932-file-not-file-us-tax-return.html)

poptart 10.03.2012 18:38

Re: To file or not to file a US tax return...
 
Quote:

Originally Posted by meloncollie (Post 1509365)
I've told this story many times, but it bears repeating:

Upon entry to the US some years ago, I presented my passport. The officer swiped it, looked at his screen, and said:

"Thank you for paying your taxes, Mrs Meloncollie."

:) I've never had that sort terrifying moment, but I did get a reminder about last year's so, I think FINALLY, the gubmint has brought all the systems into alignment to start catching more people.

NicoleCZ 10.03.2012 21:35

Re: To file or not to file a US tax return...
 
Quote:

Originally Posted by runningdeer (Post 1509270)
Actually you likely already are. The federal agencies have finally linked up IRS and Dept. State so that when you go for passport renewal there will be cross checks.

Everyone to their own, but if you contribute and your employer contributes to a retirement fund here, you have a bank account or investments, even your meager income here could easily push a low earner over US tax threshholds, especially given the exchange rate in recent times which only makes it even worse.

I said "could" in the other part of the phrase...the homework I have done puts me extremely below the threshold even with my pension plan, I'm not even in spitting distance, especially since I have no real estate or investments. :msngrin:

runningdeer 11.03.2012 13:37

Re: To file or not to file a US tax return...
 
Quote:

Originally Posted by Quebecman (Post 1509378)
Joe's husband is no longer a permanent resident.

Why a tax attorney? The situation is quite simple, really. Plus, Joe and her husband have always filed without the help of a tax attorney (in the years that they did file that is...) Why only the last 7 or 10 years? Why not all 18 years?

Joe's husband is downloading Publication 54, Form 1040 and the Instructions for Form 1040 for the last 18 years. He needs to buy a good pencil and a good eraser...:D
And 18 years of Form 2555,
And 18 years of Instructions for Form 2555.

Joe should get in touch with the IRS office in Paris, it is part of the US embassy in Paris and all the contacts and details can be found on US embassy Paris' website. They should be able to guide Joe and answer any questions. http://france.usembassy.gov/irs.html

A friend of mine was delinquent with US taxes by ignorance, contacted them, and they helped her become compliant. Not sure if they can help or not with respect to delinquent FBARs, especially if willful non-compliance is known.

Quebecman 17.03.2012 15:07

Re: To file or not to file a US tax return...
 
Update:
Joe and her husband are now trying to file Joe's USA tax return for years 1994 to 2011. They know that they don't have to go that far back but they are doing it anyway, just for fun.

Joe is a US citizen. Her husband was a permanent resident of the USA when he lived in the USA but he no longer is. They moved to country A in 1993 and he stopped being a US permanent resident at the end of 1993. They did file a joint US tax return for the year 1993.

Joe must choose her filing status for years 1994 to 2011. It looks like she has 2 options:
(a) married filing joint return;
(b) married filing separate returns.

Option (a) would be more complicated (more paper work) but would not change the tax liability. Under option (a), Joe's husband would be considered a non-resident alien (in the eyes of the IRS).

By law, Joe's husband is no longer required to file a US tax return. (Perhaps he still has to file for a year or two after he left, we must check on that). He has no income from the USA, he is not a US citizen, he is not a US permanent resident. Yet, because his wife Joe is a US citizen, they can, if they choose to, file jointly.

Option (b) is very simple. (But why is it called "Married filing separate returns" if Joe's husband does not file?) For each one of the 18 years, Joe had a single Country A employer and no other income. She meets the bona fide residence test in country A (where she lives permanently with her husband and kids). Her income is well below the foreign earned income exclusion limit. Form 2555 (Foreign Earned Income Exclusion) is extremely simple in her case. Form 1040 has number y on line 7, number (y) on line 21 and zeros everywhere else. No taxes due, no taxes paid.

Question:
Are there any reasons why it would be a good idea for them to file jointly?

Thank you.

JBZ86 17.03.2012 15:23

Re: To file or not to file a US tax return...
 
Joe needs to consider if there is any joint income held with her Canadian husband that might need reporting on US tax return this creating a potential liability.

She need only go through the offshore voluntary disclosure programme.

How old are the kids? You mention US passports so I am assuming, dependending on ages they could be claimed as dependents? If so, why not file as head of household? Better than separate.

Quebecman 17.03.2012 15:54

Re: To file or not to file a US tax return...
 
Quote:

Originally Posted by JordanBarrZurich86 (Post 1516014)
Joe needs to consider if there is any joint income held with her Canadian husband that might need reporting on US tax return this creating a potential liability.

She need only go through the offshore voluntary disclosure programme.

How old are the kids? You mention US passports so I am assuming, dependending on ages they could be claimed as dependents? If so, why not file as head of household? Better than separate.

What do you mean by "joint income"? Joe had one source of income: employer Xyz in country A. Joe's husband had one source of income: employer Cde in country A (plus less than 300$ of interest income).

Kids have US passports and Country A passports. In each of the years concerned, there was always at least one kid under 18 years of age and living at home.

But I see a problem with file as Head of household: Test 1 or Test 2 (Instruction for Form 1040, page 13) must apply. They both say that "You paid over half the cost of keeping up a home..." Well, Joe did not pay over half the cost. At best she paid half. Her husband had more income and certainly paid at least half.

Whichever filing status she chooses (among the ones that she is allowed to choose), her tax liability, no matter how you slice it, is 0. It does not get any simpler. One place of residence, one source of income, form 2555 is simple and form 1040 looks like a bunch of zeros everywhere except for 2 numbers that cancel each other (line 7 and line 21).
And it goes on like that from 1994 to 2011.


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