US Citizen married to a now ex-Greencard holder

[BumptiousQBangwhistle]

Hey All,

So 15 October is almost here and I am finally getting around to filing my taxes. (My extension from 15 June is coming to an end; technically I believe I have until 17 Oct).

Anyway, two questions. Since moving here (London) in 2005 from NY, I've filed married filing jointly - my wife was a Green card holder and so I believe I needed to include her. She gave up the Green card in 2009. My question is: Do I need to file jointly for 2010? I've read somewhere (here and elsewhere, I think) that I can file as "Married Filing Separately", and that it will save me money as I don't have to include her income etc. It seems like a white lie - I'm married filing solely, she will never file, correct? Also, if I go this route, I assume I can still claim her on the tax form as a dependent along with myself and our two kids.

Second question: This is the one that scares me. I am embarrassed to admit it but I've filed late for the last three years. I've paid my estimated taxes (though am often late on that as well), but as an example, this week I am mailing in tax forms for 2008, 2009, and 2010. EEK! I have not sent in the annoying form reporting foreign bank accounts - not because I'm trying to avoid taxes like some Swiss bank thing. So I assume I need to file this stupid form as well, and I am worried that they will come after me. When I do file my taxes I report all interest in my foreign checking accounts (it comes to like $100 a year, big whoop). Any advice on this would be appreciated. I don't want to have to pay some massive fine on what I've had in my accounts. For one brief point the accounts had a sizable amount of money (say £50,000) - this was just before we put a deposit on our house.

Thanks in advance for the advice.

FWIW, all of this is so annoying and stressful - and the hubris and arrogance of the American tax system in insisting that I continue to file - I am considering giving up my citizenship.


Thanks again, this site has been very helfpul to me.

BQB

[Bevdeforges]

Originally Posted by BumptiousQBangwhistle

Anyway, two questions. Since moving here (London) in 2005 from NY, I've filed married filing jointly - my wife was a Green card holder and so I believe I needed to include her. She gave up the Green card in 2009. My question is: Do I need to file jointly for 2010? I've read somewhere (here and elsewhere, I think) that I can file as "Married Filing Separately", and that it will save me money as I don't have to include her income etc. It seems like a white lie - I'm married filing solely, she will never file, correct? Also, if I go this route, I assume I can still claim her on the tax form as a dependent along with myself and our two kids.

Since she now has no filing obligation, you should, indeed, be filing either as married filing separately (as most of us married to foreigners do) or possibly as head of household (which may give you some advantages - but check to see if you meet the filing requirements).

Be careful, though, because you can't take the second "exemption" for your spouse if you aren't filing jointly. Whether or not you can claim her as a dependent (like you do with your kids) is kind of a good question. Read the instructions carefully - the fact that she is not a US citizen and no longer has her green card may mean you can't take her as a "dependent."

Second question: This is the one that scares me. I am embarrassed to admit it but I've filed late for the last three years. I've paid my estimated taxes (though am often late on that as well), but as an example, this week I am mailing in tax forms for 2008, 2009, and 2010. EEK! I have not sent in the annoying form reporting foreign bank accounts - not because I'm trying to avoid taxes like some Swiss bank thing. So I assume I need to file this stupid form as well, and I am worried that they will come after me. When I do file my taxes I report all interest in my foreign checking accounts (it comes to like $100 a year, big whoop). Any advice on this would be appreciated. I don't want to have to pay some massive fine on what I've had in my accounts. For one brief point the accounts had a sizable amount of money (say £50,000) - this was just before we put a deposit on our house.

Good news and bad news on this one. Yes, you really should file at least the FBAR form (declaring your foreign bank and financial accounts). The FBAR forms go to a separate address in the Treasury Dept, NOT with your tax forms.

Yes, you should be declaring your interest from foreign accounts on your income tax forms. (It's rare that you pay any tax on it if you're only talking a couple hundred $ - gets eaten up quickly by the exemptions and standard deduction anyhow.) And then you declare the accounts on the FBAR forms. Personally, I'd just file the FBAR for 2010 - like you just opened the accounts and wait for them to ask for forms for back years.

Unless you've got Swiss accounts and other stuff you're "hiding" from view, the chances of them coming after you are slim to none. If they have a question about what you've filed, they'll ask it. (I've had this happen to me - they wanted the "taxpayer identification number" of my employer here - told them it wasn't a US company and therefore has no TIN. Last I heard from them.)

Lots of folks with large investment funds are panicking as the rules are changing. But so far, if you don't have much to hide, the reporting forms are mostly just a nuisance. If they get much worse, though, I expect there will be lines forming at the consulates to renounce. But even the IRS admits (when pressed) that the purpose of all this new reporting is to find unreported income and abuse of the tax system. It's in your best interest to just declare what you have (lots of folks have a one-time spike in the balance just before buying or after selling a house) if only to "show" them that you're not evading taxes.
Cheers,
Bev

[tititita]

Hi,
we are in similar situation
i am the green card holder hubby is US Citizen
don t be a shame for filling late,he didn t file for 5 years
i was so mad and afraid we will end up in prison,he was just too busy with work
we had an amazing CPA .
I do not work now as we live in Switzerland and don t speak German but he still file as jointly.
about your citizenship,my advice keep it,you never know in life belive me i could not get my dream job in the US because i have been away for 2 years and hubby didn t fill out a re entry visa,so you know it s up to you,but if you ever get a great opportunity and can t get it because of immigration that will be a bummer.
Oh and i am the daughter of a US citizen,my mom was born in the US of an US dad and still i had to get marry to be legal to work and stay.
Hope you get answers.

[BumptiousQBangwhistle]

Thanks Bev and tititita for your help.

I finally posted them on Monday, 3 years worth of returns. Amen!

Next year will be even more complicated as I've started my own business here in the UK...

[tititita]

Glad you did at least you do oy have to think about it anymore
Take Care

[Bevdeforges]

Originally Posted by BumptiousQBangwhistle

Thanks Bev and tititita for your help.

I finally posted them on Monday, 3 years worth of returns. Amen!

Next year will be even more complicated as I've started my own business here in the UK...

For next year, read the instructions in Pub 54 very carefully. Depending on what sort of business you've set up for yourself, chances are you can report your earnings as though they were regular "salary" - and as long as you are paying into the UK system for social benefits (social insurances) you shouldn't have to worry about "self employment taxes" (i.e. US social security).
Cheers,
Bev