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Discussion Starter · #1 ·
So I am a US citizen who moved to the UK in 2007 and have since become a UK citizen as well. Since I have been in the UK I have not worked or received any benefits.

I have 3 kids seven, six and three. Two of them have their US birth certs and SSN, we have not yet registered the birth of our third child (thanks covid) as the embassy in London has been closed for all non urgent citizen issues.

I was told by a friend that I should be filing US tax returns even if they are nill as a matter of procedure. I thought if you are not working then you don't need to file.

Should I file my taxes including back taxes but the amount will be zero?
 

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Your friend is wrong. If you earn below the threshold you are not required to file. The threshold for single is currently $12,400. In 2017 the threshold for married filing separately dropped to $5, which is bizarre, but if you are truly earning $0 then you qualify. In any case, the IRS would have no idea what you earned so it's entirely up to you what to declare or not declare - it's essentially an honour system.

If you wanted to file a return this year, there's $3200 in it for you plus some additional amount for the children with SSNs, thanks to the stimulus benefit. Not sure how the mechanics of that all work but you've probably got over $5000 on the table. Until November you could have used the "non-filer" form to collect this money, but now you need to do a full return, which in your case will be very simple - zero income, two dependents, wait for the cash. Use a Wise account to get a US routing number for direct deposit instead of a cheque in the post.

PS Do you know if your banks are aware of your US citizenship? If so, any joint accounts may be subject to FATCA reporting. This is not the end of the world - though your British partner might be very unhappy to learn this - but if you ever had plans of returning to the US it might be worth considering doing the FBAR reports if the total balances exceed $10,000. Otherwise ignore this.

PPS Assuming your children were born in the UK and have dual citizenship, take precautions going forward to conceal their US citizenship from banking institutions. There's no reason they should be subject to FATCA or US tax obligations as adults if they have no interest in moving to the US.
 

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Popcas -- Nononymous is correct, there is no need to file income tax returns, if you have zero income. With that said, I would file an extension for 2020 and then file with all three dependents when you get your baby's SSN. This will allow you to receive the stimulus payments and any future child tax credits (for 2021, that's $3,600.00 per child under 6 and $3,000.00 per child for children 6 to 17.) Additionally, you might want to look at the Earned Income Tax Credit (EITC) Earned Income Tax Credit (EITC) | Internal Revenue Service (irs.gov) You may be able to "adjust" your situation to qualify for that too. The 2021 Standard Deduction, for Married Filing Separately, is $12,550.00, so if you had some sort of online "side hustle," you wouldn't owe any tax, without even invoking the FEIE or the FTC. Absolutely no need to file past tax returns.

You should file FBARs, if required, including past years. If not required, don't file. This is only an information return and does not affect your income taxes. Cheers, 255
 

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Discussion Starter · #4 ·
I have a joint account with my husband and one bank account for myself.

The joint account we opened as we needed to access a safety deposit box at Barclays bank. The account has something like £40 in it and its never been used.

I have a halifax account which has never had more than a few hundred in.

I still have a US bank account at my parents address and I think its still operational.

Thanks 255 and nonymous. I have done some reading on this and I could be due tax credits then - but though I like the thought of this - how far back can I claim these tax credit? Only for the last yr?

As to the FBARs? Would it be easier just to close the barclays bank account?

Do I need to use an accountant to fill in these returns?
 

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No need to close an account with 40 quid in it. You aren't required to file FBARs until you hit $10,000 total across all accounts in your name.

Whether you need an accountant or not depends on your competence and comfort level with this sort of thing. Your case sounds as extremely simple.

My understanding is, you'd be entitled to the stimulus benefit for this year, but going back you don't get the various child tax credits if you don't meet a relatively low minimum income standard. So if you truly earned nothing, you aren't entitled to claim those. But confirm this, I don't know all the details.
 

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popcas -- First off -- you only have an FBAR requirement if your aggregate assets in foreign accounts, that you control, or are a beneficiary to, exceed $10K. If your assets are less then the threshold, there is no reporting requirement. I would not close any account, to preclude FBAR filing. It is now done on-line and is fairly simple: Report Foreign Bank and Financial Accounts | FinCEN.gov . As I said before, this is only an information return -- basically just a paper work drill for you. Some couples have an aversion to the U.S. Government "knowing their business," so they may put the preponderance of their assets in the NRA spouse's name to stay under the $10K reporting threshold. Personally, I filed the old "paper" FBARs, for my mother, for decades, before she passed, it's not hard. I think an accountant would be a waste of money. An accountant would need you to gather the information required for him to fill out the form. Once you've gathered the information, the hard part's done!

The Stimulus Payments are only for 2020 (1st and 2d tranche) and 2021 (3d tranche.) The EITC could possibly be claimed, for past years, but I would suggest filing 2020 forward and don't bother going back ("the juice might not be worth the squeeze.)

I would also confirm that your U.S. bank account is operational. You can use this account on your 1040, to receive your tax refunds and any potential future stimulus or child tax credits. Cheers, 255
 

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I would also confirm that your U.S. bank account is operational. You can use this account on your 1040, to receive your tax refunds and any potential future stimulus or child tax credits.
A Wise account with US routing number is quick to set up and free, so may be less trouble than dealing with an actual US bank, especially it it's one that gets funny about foreign addresses.

Prior to this year the child tax credit required a minimum level of income, did it not? So technically not possible if US parent had zero income?
 

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Nononymous -- Your question: "Prior to this year the child tax credit required a minimum level of income, did it not? So technically not possible if US parent had zero income?" Yes and yes, I believe you are correct (at least that's the way I've read it.) Cheers, 255
 

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Nononymous -- Your question: "Prior to this year the child tax credit required a minimum level of income, did it not? So technically not possible if US parent had zero income?" Yes and yes, I believe you are correct (at least that's the way I've read it.) Cheers, 255
In which case, no point to the OP filing any older returns, prior to 2020.
 

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Discussion Starter · #10 ·
Nonymous and 255 thank you so much. So my tasks is simple

1) Wait till the US embassy is open and get my third child registered.
2) Check my US bank account is still operational

Now as to 1) - how long do I have to file for 2020? as the US embassy might not be fully open for CRBA for a few months.

as to 2) when I file from abroad I need to list my UK address and then won't they find it strange that I have listed a US bank account?
 

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2) They won't, it's pretty normal. But I highly recommend Wise, it might be less hassle than following up on a semi-dormant US account.
 

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popcas -- The normal time to file U.S. tax returns in the U.S. is April 15 and overseas filers get an automatic 2 month extension to June 15. This year, because of the many retroactive changes in the recently passed "American Rescue Plan Act of 2021," the regular due date has been moved to May 17, so if past history is any indication, you'll have until July 15. To be safe, I recommend you file IRS form 4868 for an automatic 4 month extension (be sure to check the block on line 8.) 2020 Form 4868 (irs.gov) In any event, the penalty for filing late is a percentage of taxes owed, since you don't owe any taxes, no penalty ("but why rock the boat.")

There is no problem using a U.S. account with a foreign address. Your return is processed automatically, without human intervention, unless it is selected for review/audit -- usually due to a math error. I suspect a preponderance of Americans abroad maintain a U.S. bank account for convenience. Cheers, 255
 

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popcas -- Your statement: "...when I file from abroad I need to list my UK address..." is not technically true. You can use a U.S. address (your parents, if you so choose, for instance.) I personally use a private mail service in the U.S., for my banks, brokerage accounts and income tax submissions, whether living abroad or not. If you later have UK income and want to exclude it from U.S. taxes, you'll need to list your UK address on IRS form 2555 -- but you can still use a U.S. address on your IRS form 1040. Cheers, 255
 

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Discussion Starter · #14 ·
popcas -- The normal time to file U.S. tax returns in the U.S. is April 15 and overseas filers get an automatic 2 month extension to June 15. This year, because of the many retroactive changes in the recently passed "American Rescue Plan Act of 2021," the regular due date has been moved to May 17, so if past history is any indication, you'll have until July 15. To be safe, I recommend you file IRS form 4868 for an automatic 4 month extension (be sure to check the block on line 8.) 2020 Form 4868 (irs.gov) In any event, the penalty for filing late is a percentage of taxes owed, since you don't owe any taxes, no penalty ("but why rock the boat.")

There is no problem using a U.S. account with a foreign address. Your return is processed automatically, without human intervention, unless it is selected for review/audit -- usually due to a math error. I suspect a preponderance of Americans abroad maintain a U.S. bank account for convenience. Cheers, 255
I have read up on this - can I efile or should I use the paper? The form itself seems straight forward.

I think I just complete as nill for everything?

So what is my filing status? I am a dual US/UK citizen married and my husband is UK citizen.

Also when I receive this cheque I assume that I need to declare this as UK income to HMRC? I will still be below the thresholds I think but how does this work from the UK perspective?
 

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You can only efile a current tax return (i.e. the return for 2020 that is due in May this year). You should file as "married, filing separately" since filing jointly requires that you declare all your husband's worldwide income too. However, if you have no income, you may not be able to declare your kids as "dependents" which means that you probably won't get the "Covid relief payment" for the kids. (I am not at all sure about that - someone here will have a better idea.)
 

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The stimulus benefit is not "income" - it's essentially an advance on a future tax return or some such thing. I can't speak for the UK but other countries have announced that it is not taxable and does not need to be declared.
 

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popcas -- As you've seen, the forms aren't that difficult. I routinely use the free IRS fillable forms (but I may be a kind of dinosaur.) My understanding, by reading on this forum, that some of the online software doesn't play well with overseas filers (or anything out of the ordinary.) You can choose your own filing status. Some Americans overseas file "Married Filing Jointly." for various reasons. I think the preponderance of folks, on this forum, with an NRA spouse, file "Married Filing Separately," and just list their spouse as "NRA." When I was younger, I used to calculate both ways and chose the most advantages submittal option, for our family situation.

Yes, when filling out your 1040, just put zeros, where there is a total (usually in bold.) Just leave everything else blank.

As to Bev's concern, the "American Rescue Plan Act of 2021" made the Child Tax Credit, fully refundable. Previous rules limited the tax credit to families earning at least $2,500.00. So in your case, you do not need to be employed to receive the credit.

Nononymous is absolutely correct -- a tax credit is not "income." Credits are normally only received when you receive your tax refund (for over payment of income taxes.) In these COVID times, there have, and may be more, "advances" issued towards various "stimulus" credits. You'll "balance the books," so to speak, when you complete your annual tax return. So no, I see no reason to report this , as income, to the UK HMRC. Income Tax - GOV.UK (www.gov.uk) Cheers, 255
 

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Previous rules limited the tax credit to families earning at least $2,500.00. So in your case, you do not need to be employed to receive the credit.
But the question is whether or not you can claim the child tax credit if you are not claiming the child (or children) as dependents. For that, the kids need their US SS numbers. But also (possibly) to be filing jointly (or as head of household) - in order to for the kids to qualify as dependent on you.

Filing jointly with an NRA spouse just to qualify for the child credit could have unintended consequences for the longer term. If you file jointly with an NRA spouse, then you have to file as if that NRA spouse were US resident for the entire tax year (and get an ITIN for the spouse). Depending on the spouse's financial situation, you could be looking at a vastly complicated return - even if there is little or no tax due.
 

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Bevdeforges -- "But the question is whether or not you can claim the child tax credit if you are not claiming the child (or children) as dependents. For that, the kids need their US SS numbers. But also (possibly) to be filing jointly (or as head of household) - in order to for the kids to qualify as dependent on you." Yes -- you have to claim the children as dependants.

I have not seen any specific guidance on irs.gov yet (probably too new,) but I have read dozens of articles, reporting on the new Act. Every report has been clear that there is no income requirement to qualify for the Child Tax Credit going forward. So to get into the system, popcas needs to file her 2020 tax return, with her 3 children's SSNs, and complete the "Recovery Rebate Credit Worksheet" on page 58 of the "IRS 2020 1040 and 1040-SR Instructions," in order to reconcile her stimulus payments on line 30 of IRS form 1040. When she lists her U.S. bank account for her 2020 refund -- she'll be set-up for any force fed "advance" payments in the future. The original House intent was to make monthly payments, but in conference, monthly was changed to periodic. The IRS Commissioner has stated publicly, that the IRS is overwhelmed and doesn't have the capability to focus on these "extra" payments until after tax season (due to the retroactive nature of parts of the Act and the extended filing deadline.) Time will tell how it all ends up! Cheers, 255
 

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Discussion Starter · #20 ·
Your friend is wrong. If you earn below the threshold you are not required to file. The threshold for single is currently $12,400. In 2017 the threshold for married filing separately dropped to $5, which is bizarre, but if you are truly earning $0 then you qualify. In any case, the IRS would have no idea what you earned so it's entirely up to you what to declare or not declare - it's essentially an honour system.

If you wanted to file a return this year, there's $3200 in it for you plus some additional amount for the children with SSNs, thanks to the stimulus benefit. Not sure how the mechanics of that all work but you've probably got over $5000 on the table. Until November you could have used the "non-filer" form to collect this money, but now you need to do a full return, which in your case will be very simple - zero income, two dependents, wait for the cash. Use a Wise account to get a US routing number for direct deposit instead of a cheque in the post.

PS Do you know if your banks are aware of your US citizenship? If so, any joint accounts may be subject to FATCA reporting. This is not the end of the world - though your British partner might be very unhappy to learn this - but if you ever had plans of returning to the US it might be worth considering doing the FBAR reports if the total balances exceed $10,000. Otherwise ignore this.

PPS Assuming your children were born in the UK and have dual citizenship, take precautions going forward to conceal their US citizenship from banking institutions. There's no reason they should be subject to FATCA or US tax obligations as adults if they have no interest in moving to the US.
Is this what you meant by a wise account?

 
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