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Marcoregano · Joined: 19 May 2003 Posts: 872 Location: Hong Kong

My wife hasn't filed for 10 years (a combination of plain laziness and exasperation with the forms). However, her salary has never gone beyond the overseas allowance.

Anyways, now she's decided it's time to get back on track. Any advice? Has anyone else missed a few years or more?

According to advice from the Overseas Tax Service she might as well just file for the current year (ie. get her forms in by June 15) with an explanatory note - and see what the IRS says re. the missing years. In other words, not bother filling out forms for the last 10 years at this stage.

johnslat · Posted: Tue Jun 02, 2009 2:44 am Post subject:

Dear Marcoregano,

"she might as well just file for the current year (ie. get her forms in by June 15) with an explanatory note - and see what the IRS says re. the missing years. In other words, not bother filling out forms for the last 10 years at this stage."

In my opinion, that's the way to do it. I knew a number of people in Saudi in the same position. They did that (without any explanatory note, however) and never got any flak from the IRS.
Regards,
John

johnslat · Posted: Tue Jun 02, 2009 2:46 am Post subject:

Dear Marcoregano,

"she might as well just file for the current year (ie. get her forms in by June 15) with an explanatory note - and see what the IRS says re. the missing years. In other words, not bother filling out forms for the last 10 years at this stage."

In my opinion, that's the way to do it. I knew a number of people in Saudi in the same position. They did that (except they didn't include any "explanatory note") and never got any flak from the IRS.
Regards,
John

Jati · Joined: 11 Mar 2008 Posts: 155

Jati · Joined: 11 Mar 2008 Posts: 155

From Publication 54: Tax Guide for U.S. Citizens and Resident Aliens Abroad (for 2008 returns)

Introduction
This publication discusses special tax rules for U.S. citizens and resident aliens who work abroad or who have income earned in foreign countries.

If you are a U.S. citizen or resident alien, your worldwide income generally is subject to U.S. income tax, regardless of where you are living. Also, you are subject to the same income tax filing requirements that apply to U.S. citizens or resident aliens living in the United States. Expatriation tax provisions apply to U.S. citizens who have renounced their citizenship and long-term residents who have ended their residency. These provisions are discussed in chapter 4 of Publication 519.

You might be right about not having to file for income earned under US$9,000, but not for an amount under the foreign earned income exclusion amount of US$87,600. My reading is that one must file.

In summary, for a single person under age of 65,
if you make less than US$8,950 IN the USA, no need to file;
if you make more than US$8,950, you NEED to file.

Thus,
overseas filers making less than US$8,950, no need to file; but
making over US$8,950 MUST file. You will not, however, be taxed on any amount less than US$87,600.

For a single person over the age of 65, the amount is not US$8,950, but US$10,300.

Sorry to rain on anyone's party. That's how it reads to me (from the Form 1040 instructions), and the tax accountant that I used when I filed my first overseas return.
Rolling Eyes

MrMrLuckyKhan · Posted: Wed Jun 03, 2009 3:30 am Post subject:

fladude · Joined: 02 Feb 2009 Posts: 432

Nature Girl, I'm not sure who your CPA is, but their advice to you was horrible. My dad ran an accounting firm in Florida for years and... well all I can tell you is that if your income is under 90k... basically don't worry about it. Even if it's over that you can under some circumstances deduct the taxes of the other country. And if you are self employed... only your profits are taxed after you pay your deductions. So.... you could do a lot with that. So essentially there is no need to pay taxes unless your income is huge. If you are really worried about it just don't put more than 5k in any one bank (which is sensible anyway). As for social security, you are not required to pay it if you are self employed.

As for not filing... people don't file all the time. The IRS really doesn't care unless their records indicate that you made serious money. They aren't going to track you down.

As for selling your flat. Remember that a sale of real estate is not income tax, it is capital gains tax. I would probably not worry about it. Just don't put 10k in the one bank.

Vince · Joined: 05 May 2003 Posts: 559 Location: U.S.

I've known a few people who, when getting a green card for their spouse, were required by the Embassy to provide copies of filed tax forms.

Debito Arudou, a blogger and rights activist in Japan, has a page about his renunciation of his US citizenship (his site has gotten pretty big, and I can't find the page now). Some of the US government policies he describes might be outdated, but it's still interesting reading.

gaijinalways · Joined: 29 Nov 2005 Posts: 2279

Marcoregano posted

Marcoregano · Joined: 19 May 2003 Posts: 872 Location: Hong Kong

gaijinalways · Joined: 29 Nov 2005 Posts: 2279

Yes Marcoregano, she could do that. You can also estimate your earnigns for the other years. If her income is below the exclusion amount, it's not really going to matter. But if you ever do decide to move to the US, the last thing you want is to be audited down the line because the IRS is wondering why you didn't file.

Marcoregano · Joined: 19 May 2003 Posts: 872 Location: Hong Kong

Oops! The deadline is on Monday (15th) - no chance now of getting her forms in on time. So there goes another year! Shocked

Yeah, I know she can apply for an extension. But will she? Rolling Eyes

naturegirl321 · Joined: 04 May 2003 Posts: 9041 Location: home sweet home

gaijinalways · Joined: 29 Nov 2005 Posts: 2279

johnslat · Posted: Sat Jun 13, 2009 4:33 pm Post subject:

Dear naturegirl321
If nothing is owed, or if the IRS owes you, there are no penalties for late filing.
Regards,
John