Ok, I have been driving myself crazy since April 15th is not too far away...and as all Americans know, that is T-Day...TAX DAY.

I am curious as to how many expats on this thread file with the IRS in the States, and what procedure you follow when you file.

This year, I�ll be filing jointly with my husband (or separately...) and I need a TIN for him (Tax ID number.. an ss# for non-US Citizens). Any other cross cultural married couples who are or were in the same boat at one time or another?

Tonytorero and I chatted about it this morning and with his good graces, I am posting the text of our chat...

quote:

reb_gaspar: speaking of systems and bureaucracy....
reb_gaspar: what do you guys do about filing taxes in the USA?
tonytorero2000: Uhhhh. we don't. Haven't had anything to file since '98.
reb_gaspar: This year, I will be filing jointly with Angel and am kind of at a loss as to how the whole thing works.
tonytorero2000: Do you still file?
tonytorero2000: I sold off my savings bonds and all my property before we came over.
reb_gaspar: One expat told me that I should continue to file in the event that we should ever decide to relocate to the USA, it would make the reintergration easier.
reb_gaspar: I still maintain a bank account there, but everything else is over here. tonytorero2000: I'm not doubting it would be tricky at first to reintegrate, but I just don't have time or 'ganas' to do it. I figure we'll cross that bridge when we come to it, but that's just me.
reb_gaspar: the bank account doesn�t have any significant money in it...just to make family financial transactions easier.
reb_gaspar: maybe I�ll make that a post on jer�s board. I�d be interested in hearing other expats� experiences.
tonytorero2000: I probably still have 4 accounts but I don't use any of them.
tonytorero2000: That's not a bad idea actually. I wonder if Val files?
reb_gaspar: last year I filed for 2001 but that was because I stilled earned money through Mar. 2001 in the states.
tonytorero2000: I see. I haven't received a US paycheck since 98. Besides, I've been to the Embassy and back to the US a bunch of times. I guess, if they had me on their 'bad guy list' they'd have already got me...
reb_gaspar: at the rate I am going....would have to file for an extension anyway since I need to get a TIN (Tax id number) for Angel (similar to our ss#) what a freaking pain in the a**
reb_gaspar: aw heck...I�ll start a thread and you can post on it.

Let the posting begin!!

ugh, taxes. because i write for an american company, i have to file. i went and got a handy kit from the us embassy but have yet to crack it open. probably because this is my first year also filing with a 1040 and itemizing. yuck. if anyone knows of an american that has experience with itemizing, let me know. i have a baggie full of reciepts that i am dying to write off.

either way i plan on tackling the monstrosity next week, will let you know how it goes.

Candela

Chica and Candela,
I have great sympathy with you guys! I hate taxes! I too will be doing my taxes this weekend!I recently realized that even if you work abroad you still owe the IRS money. Do you also have to pay taxes to Spain as well?

Anyway, the IRS does have a fantastic website with downloadble forms and everything!

Good luck!
Carmen

Booklady wrote...

quote:

I recently realized that even if you work abroad you still owe the IRS money

WHAT????

Please elaborate as I have not filed with IRS since 1996 (last year I worked on the books in the U.S.A.).

Saludos,
jer...

Hi Jer,

I'm sorry for the news . But it seems that that is the case, maybe you qualify for the exclusion, let's hope so.

Let me know if there is anything I can do.

The IRS website.


Frequently Asked Questions



13.7 Aliens and U.S. Citizens Living Abroad: U.S. Citizens Overseas
I am a U.S. citizen working abroad. Are my foreign earnings taxable?

If you are a United States citizen or a resident alien who lives and works abroad, you may qualify to exclude all or part of your foreign earned income. For specific information, refer to Tax Topic 853, Foreign Earned Income Exclusion - General.

If you would like more information on who qualifies for the exclusion, refer to Tax Topic 854, Foreign Earned Income Exclusion - who qualifies. For more information on what type of income qualifies for the exclusion, refer to Tax Topic 855, Foreign Earned Income Exclusion - what qualifies. You may also wish to refer to Publication 54 (PDF), Tax Guide for U.S. Citizens and Resident Aliens Abroad.

If the information you need relating to this topic is not addressed in Publication 54, you may call the IRS International Tax Law hotline. The number is (215) 516-2000. This is not a toll-free number.


References:

Publication 54 (PDF), Tax Guide for U.S. Citizens and Resident Aliens Abroad
Tax Topic 853, Foreign Earned Income Exclusion - General
Tax Topic 854, Foreign Earned Income Exclusion - who qualifies
Tax Topic 855, Foreign Earned Income Exclusion - what qualifies

I live in a foreign country. Where can I find local tax assistance and forms?

The IRS has a full-time permanent staff in 8 U.S. Embassies. These offices have tax forms and publications, can help you with account problems, and answer your questions about notices and bills. For more information about these offices, please refer to http://www.irs.gov under "Contact My Local Office."


I am a U.S. citizen and married a nonresident alien last year. At that time, we filed an application with Immigration Naturalization Service (INS) for my spouse's adjustment of status. We plan to file married filing jointly. Will I need to use Form 1040NR?

As a U.S. citizen, you cannot file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. If you make an election to file a joint return with your nonresident alien spouse (your spouse must, in turn, elect to be taxed as resident), file Form 1040 (PDF), U.S. Individual Income Tax Return, and report both incomes from worldwide sources. You will need to get an ITIN for your spouse. To apply for an ITIN, file Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number.


References:

Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return
Form 1040 (PDF), U.S. Individual Income Tax Return
Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number
Tax Topic 857, Individual Taxpayer Identification Number - Form W-7

I worked out of the country for one year. What tax do I have to pay?

As a U.S. citizen, your worldwide income generally is subject to U.S. income tax, regardless of where you are living. However, you may qualify for the foreign earned income exclusion, foreign housing exclusion or foreign housing deduction, or the foreign tax credit.


References:

Publication 54 (PDF), Tax guide for U.S. Citizens and Resident Aliens Abroad
Publication 514 (PDF) , Foreign Tax Credit for Individuals
Form 2555 (PDF), Foreign Earned Income
Form 2555EZ (PDF) , Foreign Earned Income Exclusion
Form 1116 (PDF), Foreign Tax Credit

I am a U.S. citizen working for a U.S. firm in a foreign country. Is any part of my wages or expenses tax deductible?

U.S. citizens are taxed on their worldwide income, no matter where they work. Some taxpayers may qualify for the foreign earned income exclusion, foreign housing exclusion, or foreign housing deduction, if their tax home is in a foreign country and they were either a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or were physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. If the taxpayer is temporarily away from his or her tax home in the United States on business (less than a year), the taxpayer may qualify to deduct away from home expenses (for travel, meals, and lodging ) but would not qualify for the foreign earned income exclusion.


References:

Publication 54 (PDF), Tax Guide for U.S. Citizens and Resident Aliens Abroad
Publication 514 (PDF), Foreign Tax Credit for Individuals
Publication 463 (PDF), Travel, Entertainment, Gift and Car Expenses
Form 2555 (PDF), Foreign Earned Income
Form 2555EZ (PDF), Foreign Earned Income Exclusion
Form 1116 (PDF), Foreign Tax Credit
Tax Topic 514, Employee Business Expenses

I am a U.S. citizen living and working overseas. Can I have a tax credit on my U.S. taxes for the taxes I pay to the foreign country?

The foreign tax credit is intended to relieve U.S. taxpayers of the double tax burden when their foreign source income is taxed by both the United States and the foreign country from which the income is derived.

Generally, only income taxes paid or accrued to a foreign country or a U.S. possession qualify for the foreign tax credit. You can choose to take the amount of any qualified foreign taxes paid or accrued during the year as a foreign tax credit or as an itemized deduction. To choose the foreign tax credit you must complete Form 1116 (PDF), Foreign Tax Credit and attach it to your Form 1040. You may claim credit without attaching Form 1116 if all of your foreign source income is passive income (such as interest and dividends) reported to you on a payee statement and the total amount of qualifying foreign taxes you paid or accrued is not more than $300 ($600 in the case of a joint return) and is also reported to you on a payee statement. To choose the deduction, you must itemize deductions on Schedule A, Form 1040. You may not take either a credit or a deduction for taxes paid or accrued on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. There is no double taxation in this situation because the income is not subject to U.S. tax.


References:

Publication 54 (PDF), Tax Guide for U.S. Citizens and Resident Aliens Abroad
Publication 514 (PDF), Foreign Tax Credit for Individuals
Form 1116 (PDF), Foreign Tax Credit
Tax Topic 856, Foreign Tax Credit

Wow Booklady, thanks.

That was an EYEFUL indeed

I know it may be irresponsable of me but I think I am going to throw caution to the "viento" ("wind") and take a chance.

Let em come & get me!!!

Saludos,
jer...

Candela --
I am supposing that that handy tax kit was free courtesy of our tax dollars? I am headed to the embassy tomorrow!

...All together now... �HOSTIAS! Booklady, are you sure you're content working as a librarian? From what I can see, it would certainly appear as if you have a budding future as a tax attorney should you wish to leap at this exciting career option...NAHHHH! Just hurry up and come to Spain... Jer, Chica and I will pay you handsomely to become our tax advisor!

That's a sobering 'bit' of information to read no doubt. I suspect it's more administrative than anything else, but hey....you never know...

I'll put that link and info you've posted to good use. Many, many thanks over for looking out for and thinking of the collective benefit of multimadridians everywhere!

Booklady writes:

quote:

I recently realized that even if you work abroad you still owe the IRS money. Do you also have to pay taxes to Spain as well?

I pay taxes here because I am self employed and bill my clients. I also have to pay social security to the tune of about 200€ a month. So, I am supposing that since I am a bonafide resident of Spain, I qualify for the exemption and don�t have the double tax burden. What a heck of a lot of paperwork for the little money that I actually earn!!!!

Hi there fellow expats!

Yes, I am one of the few Americans over here on my own (not sent over as an official expat for an American company where they do your taxes, etc., etc.), who has always filed my US taxes.

Here's how it works: if you work here and are a resident:

(1) You must get an extension every single year! This is because taxes are due in April there and not until July here and we don't even have our tax papers here yet! This is free, but paperwork!
(2) You file here (Spanish taxes) when due.
(3) You file there (US taxes) using your paperwork from here plus papers from US accounts.
(4) The good news is: if you earn under USD70,000, as unfortunately most of us do here in Spain where salaries are low, then you have exemption and don't pay anything at all!
(5) Even if over this, you get a tax deferral or even a tax credit (as the tax rate is higher here than there).

However, I must admit, that I do my own taxes here...often fighting with my husband, one of the few annual fights we have! Its such a pain! For us ex-pats, its better to file seperately! Uncle Sam doesn't care about our Spanish husband/wife's earnings (unless a green card holder I imagine, and my husband has never lived in the US).

I do NOT do my own US taxes. I have a very good, but too expensive guy in Chicago. I keep on paying him (charges 300-800 $) because he is good and reliable, etc. However, you should be able to easily find a good reasonable guy/gal at HR Block or the likes in your home towns.

Finally, I think ITS WORTH IT to try to not break the law unless really necessary! Our country is cracking down on other things thanks to the international situation! For example, US citizens who are minors living overseas (my son) are now given a "seperate" treatment! To renew their passports (I was shocked when did this last year), they now need all of the original paperwork again (birth certificates, etc., etc.) plus BOTH parents must sign in front of the Consulate. If not, they lose their citizenship! Yikes!

There has never been a crack-down, that I know of, of non-filers. However, they could, theoretically, refuse to renew passports, fine, or whatever. I am not a Spanish citizen, so I don't want to take any risks with my US citizenship! I am very happy here, as some of you know and have no plans to go back to live in the US.

However, I know if anything ever happened to my husband, I might have to go back. Why? Because, in Spain our two salaries are less than one salary in the US for our backgrounds/jobs and if we lose our jobs here, we have a high probability of never finding another one in our specialties. In our areas its easier to get a job in London from Spain than in Spain!

Anyway, its a very personal decision. I have heard that most ex-pats don't file and nothing happens to them. I just feel better and more secure (maybe its the fact that I have a child to support, if it were just me alone, well, I suppose I'd get by alone here somehow).

If you want to discuss this further, send me an email and I'll call you. Sorry, I don't know anyone to do US taxes from here...maybe the Embassy has a list?

Good luck and hope to see you guys sometime soon! Somehow I missed the brunches, so hope to catch the next one!

Val :cheers:

quote:

originally posted by Val:
[qb]For example, US citizens who are minors living overseas (my son) are now given a "seperate" treatment! To renew their passports (I was shocked when did this last year), they now need all of the original paperwork again (birth certificates, etc., etc.) plus BOTH parents must sign in front of the Consulate. If not, they lose their citizenship! Yikes!
[/qb]

We just went through this for our little one last month and it really has gotten much more difficult than it was previously. On top of everything that Val has mentioned, they no longer mail it to you. You have to pick it up personally and they even call your home a few days after to verify that it was in fact YOU that picked the passport up. I was really surprised.

Thanks for sharing that info Val. Between you and Booklady, I at least feel much more educated now. We'll see what we do... Kudos to Chica for starting this subject up. And who said that chat's are useless!

BTW Val: Mari and I miss you guys (and everyone else) too! We hope to get together with you and others here soon now that the weather is warming up...Give our best to your two guys...!

:cheers:

Yes, we'd love to see you guys again soon also! Sammy asks about Anissa! We'll be away this weekend, but let's get together soon. Now that its warmer...more brunches, BBQ's, etc., etc.

Well, this should be on another thread, so I'll stop!

Bye for now!

Val

Hi ,
I found this information on the web site of US Embassy in Madrid .I really don't know if it can be helpful ?

Goodluck!

Birsen


Tax Matters:
Residence overseas does not exempt American citizens from federal income tax filing requirements, which are determined by income. It may, however, change tax liability. Legal permanent residents of the US and those with property or business interests in the US may also have tax liabilities. You should consult the Internal Revenue Service (IRS) if you need more detailed information. The U.S. Embassy in Madrid has no IRS representative, but a regional IRS representative responsible for Spain is located in the US Embassy in Paris. We suggest, therefore, that any questions concerning your individual or corporate income tax be addressed to:

Internal Revenue Service
U.S. Embassy Paris
2 Avenue Gabriel
75382-Paris
Cedex 08
France
(33) (1) 4312-2555
http://www.amb-usa.fr/irs/irs.htm

Internal Revenue Service
PO Box 920
Bensalem, PA 19020-8518
Phone: 001-215-516-2000
http://www.irs.gov

Jer.........Hope your IRS situation is cleared up. Hate to be seen associating with a known felon, although I was observed in the company of two Guardia Civil escorts last November.

See you in early May.....Los Gabrieles...flamenco en vivo...gratis. Let me know if you guys still like that instant pancake stuff.

Thyglow

I thought that it was ok not to file if you don�t owe any taxes. It�s only if you DO owe taxes and don�t file is when things get bad. I think this is how is works, can anyone back me up on this?