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to ask if anyone else is filing an expat US tax return 1040 and if so how they avoid being taxed on pension contributions>?

(7 Posts)
MissTriggs Fri 19-Feb-16 14:09:04

sorry, posting for traffic. I am British, dh is American

dh and I have just spent an awful morning finding out about the tax returns he should have filed but hurrah! there is an amnesty. So we have to fill in 3 years of tax returns and 6 FBARS.

If he files as "married filing separately" putting his notional gross salary down he will be earning just a little too much to get rid of all the tax nastiness through the "foreign earned income" exception. but that's only if we include his pension contributions.

Does anyone know how you deal with uk pension contributions on the form? All the websites say there is a tax treaty making uk pension contributions (employers scheme) non-taxable in the USA but they don't tell you how achieve this when you fill in the form.

thanks in advance.

SweetAdeline Fri 19-Feb-16 14:19:04

I'd use an accountant if this is his first time filing. i attempted mine first then gave up and paid someone and got very different results. I'm not stupid (PhD in numeric subject) but the IRS don't really write their guidelines specifically enough for non-residents to diy unless the circumstances are very straight forward. I used a cheapie online expat accountant.

You can save the money by doing your fbars yourself though as they are more straightforward.

You'll get lots of people coming on here recommending turbo tax etc but I've not found one that accepts a UK address/telephone number and/or a non-filing spouse/non-US spouse.

SelfRaisingFlour Fri 19-Feb-16 14:47:31

I did my own forms, but I don't know the answer to this. I did 5 years of tax returns and then renounced my citizenship last year.

There is an International Tax Payers helpline in Philadelphia. I called them once and they were helpful. The number will be on the IRS website. There is also an IRS drop in service at the US Embassy in London. I think they might have a phone line too. It will be on the US Embassy's website.

SweetAdeline is right, the FBARS are easy to do yourself on online so long as you just have ordinary types of accounts in the UK.

theycallmemellojello Fri 19-Feb-16 14:53:09

I'd use an accountant. The IRS have a helpline but are clearly not impartial! US tax forms are a total nightmare. You should also just read the treaty itself, if you don't want to consult an accountant. But at the end of the day, if you're right that it's not taxable, I don't think they could get you for not declaring it? I am no expert and this is not legal advice!

SweetAdeline Fri 19-Feb-16 14:56:44

My very limited understanding is that they can only charge you a percentage of the unpaid amount so technically they can't fine you if it's not owes anyway. But I think they get round this by having harsh penalties for failing to complete the forms accurately confused

MissTriggs Fri 19-Feb-16 15:00:25

it would probably be cheaper to pay the tax!

Dinglethdragon Fri 19-Feb-16 15:01:32

I've never used this company but I know and hugely respect someone who works for them.

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