IRS Gives Expats Double-Whammy On Filing Taxes

[Deleted]

I can't even talk about taxes. We owed both in the UK and the US. 

[Deleted]

Mar 13, 2015 6:12:27 GMT -5 RockNVoll said:

Mar 13, 2015 5:06:55 GMT -5 @uwhuskygirl said:

I can't even talk about taxes. We owed both in the UK and the US. 

I thought that almost never happened!  Crap, now you've given me something new to worry about

That's what I thought too!

Thankfully it's not a lot, but just having to pay more in both countries irks me. 

We also did sell the house in 2014, so that may have something to do with it for US taxes. And for UK taxes I don't think our private health insurance was taxed correctly in H's salary, so I think that's why we owe there. 

[brainie]

For FACTA, what do banks do for dual citizens?

Also, it looks like if they're closing the IRS centers overseas, won't that make it harder to audit us? Like I can stop losing sleep over doing my tax forms incorrectly?

Lastly, did you see the fees for renouncing US citizenship has increased from $500 to $2,500?

Seriously, US taxes raises my blood pressure to dangerous levels.

[Deleted]

Mar 13, 2015 10:41:17 GMT -5 brainie said:

Lastly, did you see the fees for renouncing US citizenship has increased from $500 to $2,500?

I didn't realize that this was a recent change. I noticed that fee on the forms in the embassy when I went to get more pages in my passport. 

I told H that the US government is squeezing every last little bit they can out of you before you go. 

It still irritates me that it's like $110 or whatever for a new passport (and free for double pages from the outset), but $80 for another set of pages after the fact. Thankfully the embassy lady gave us 2 sets of pages for $80 instead of 1. 

[orriskitten]

Ugh this all makes my head spin!

We used a company to file and it was infuriating all around. And we can't file till May, which didn't get communicated to us until we finished, signed and paid.

[origami]

I am burying my head in the sand about all this. Before we moved I was the one who did our taxes every year. But now DH has to do it because he's the one the accountants communicate with. They asked him to fill out what amounted to a sample 1040 and it took maybe 10min before he quit and emailed them to say "just file an extension. This isn't gonna happen." Also DH's company sent our W2 to our US address. How do you of all companies not know where we are?

[Deleted]

I haven't even looked at the forms this year yet. I'm very frustrated with the whole thing.

[pittpurple]

Well crap. I don't understand this at all to be honest. DH has been doing it for years but I'm wondering if we'll need an accountant's help this time, there's something about our savings account that's a problem (we had a chunk of money in our account for a brief moment before buying our house).

It's all really irritating.

[GilliC]

Mar 13, 2015 10:41:17 GMT -5 brainie said:

For FACTA, what do banks do for dual citizens?

Also, it looks like if they're closing the IRS centers overseas, won't that make it harder to audit us? Like I can stop losing sleep over doing my tax forms incorrectly?

Lastly, did you see the fees for renouncing US citizenship has increased from $500 to $2,500?

Seriously, US taxes raises my blood pressure to dangerous levels.

FATCA - Dual citizens who hold US citizenship are US citizens and are therefore required to report (and be reported on).

Audits - Nope. Two of my colleagues and I all got audited this year. Our audits were all handled by US-based IRS centers (incidentally each of our auditors was located in a completely different state). A double pain in the ass, because it meant that all of our supporting documentation had to be mailed back to the US. At our expense.

Renunciation fees - FATCA has caused so many people to renounce, that the number went way up and the embassies realized that the original fee wasn't actually covering the considerable expenses of handling the paperwork and processing!

[GilliC]

I feel like if the bank reporting thing has gone into effect we should be allowed to stop filing the damn FATCA form. Isn't the whole point that they get the information from the banks? If they already have the information, why do I have to send it again?! Fuck you, Treasury Departmen!

[origami]

Mar 16, 2015 5:58:34 GMT -5 pittpurple said:

Well crap. I don't understand this at all to be honest. DH has been doing it for years but I'm wondering if we'll need an accountant's help this time, there's something about our savings account that's a problem (we had a chunk of money in our account for a brief moment before buying our house).

It's all really irritating.

the FBAR?

[mrsukyankee]

Time to start saving for my renunciation. I can't believe they are charging that much money to leave your citizenship. Yet again, another way to fuck with the middle class people who are permanently living overseas.

[dorothyinAus]

I just did my taxes today. Though mine were pretty easy as I had no income from either the US or Australia, so I just filed a zero return. I don't think I actually have to file a return, but I'd rather file a zero return than have trouble later. But I had to file by mail as the IRS will not let you e-file a zero return.

As for the bank reporting, none of my accounts qualify for reporting. I've deliberately kept my name off the accounts that have balances that would require reporting.

But I understand the frustration with the system for people who have to file/pay.

mrsukyankee, are you considering renouncing your citizenship?
I find that a very interesting decision. I'm not a gung-ho American patriot, but I still have very close family in the US and do not want to have to get a visa should I need to go back quickly. That and the fact that if anything happens to DH I'll go back to the US.

[rupertpenny]

Mar 19, 2015 3:31:37 GMT -5 mrsukyankee said:

Time to start saving for my renunciation. I can't believe they are charging that much money to leave your citizenship. Yet again, another way to fuck with the middle class people who are permanently living overseas.

Do you have UK citizenship already? That will hopefully make it easier. This is mostly what my H does for a living (tax lawyer who works exclusively with US citizens abroad) so if you ever have questions I can ask him.

This also reminds me that I should ask my sister who lives in the UK if she has filed her taxes yet. I know when she moved over there she didn't have any idea that you had to do that.

[mrsukyankee]

Mar 19, 2015 6:09:58 GMT -5 rupertpenny said:

Mar 19, 2015 3:31:37 GMT -5 mrsukyankee said:

Time to start saving for my renunciation. I can't believe they are charging that much money to leave your citizenship. Yet again, another way to fuck with the middle class people who are permanently living overseas.

Do you have UK citizenship already? That will hopefully make it easier. This is mostly what my H does for a living (tax lawyer who works exclusively with US citizens abroad) so if you ever have questions I can ask him.

This also reminds me that I should ask my sister who lives in the UK if she has filed her taxes yet. I know when she moved over there she didn't have any idea that you had to do that.

Yes, I do have UK citizenship. My only concerns are around my retirement funds in the US (from working in the US & my ASL retirement fund) and what would happen with them should I renounce. A few of my reasons for thinking about doing so is I have no plans to return to the US, we're going to be selling a house or two here (or renting out one of them) & that would mean paying the US capital gains tax and not being able to do much with retirement funds here or the US.  

Thanks for offering your H's help - I may hire someone to talk through all of this sooner rather than later.

[rupertpenny]

My H says you might have to pay 30% of the value of the accounts either when you expatriate or when you access the money, depending on the account. But unless you're really rich (worth more than $2mil) it shouldn't be that complicated.

He says you should definitely hire a lawyer though, haha, and he would be happy to recommend his firm.

[mrsukyankee]

Mar 19, 2015 7:36:20 GMT -5 rupertpenny said:

My H says you might have to pay 30% of the value of the accounts either when you expatriate or when you access the money, depending on the account. But unless you're really rich (worth more than $2mil) it shouldn't be that complicated.

He says you should definitely hire a lawyer though, haha, and he would be happy to recommend his firm.

Thanks - can you PM me your H's firm info cause I would like it.

dorothyinAus, as a UK citizen, it's very easy to get a visa to the US and quickly so I wouldn't have to worry about that.  I also don't want to move back to the US if my H dies as I won't live near my family and feel this is my home.