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Discussion Starter · #22 ·
Hi everyone, just a quick update.

So I finally sat down and read through this.

1st stimulus check - $1200 per adult, $500 per dependent child under 17
2nd stimulus check - $600 per adult and $600 per dependent child
3rd stimulus check - $1400 per adult and $1400 per dependent

To recap I don't work, have never worked whilst in the UK. I have 3 kids under 7, of which 2 have their SSN.

The stimulus checks would amount to
Stimulus 1 = 1200 + 500 + 500 + 500 = 2700
Stimulus 2 = 600 +600 + 600 + 600 = 2400
Stimulus 3 = 1400 + 1400 + 1400 + 1400 = 5600

Grand Total = $10,700

However as I cannot currently claim for my third child (he doesnt have his SSN yet) that would be (500 + 600 + 1400) = $2500 less.

So my plan was to follow the great advice on here. File an extension using form 4868 to take my filing deadline to 15 October and then try and get my third child SSN and then submit my tax return and apply for the Recovery Rebate as part of my return for the stimulus checks.

Everything seems great until my doting dad got involved.

He spoke to his accountant and relayed the following

1) There is no need to file an extension to 15th October as its automatic.
2) We need to complete the tax return asap as the stimulus checks can be withdrawn at any time. Don't lose $8200 for the sake of an extra $2500.
3) There is no point waiting for my third child SSN, he can always file an amended return when we get it. (isnt this messy?)

So in light of this, my father has been calling me asking for our details - passport and SSN of my kids and myself. I explained to him the plan but hes insistant that his accountant is right.

I understand the only reason to delay is to get my child SSN and then the extra $2500 but is my father accountant just being pushy?
 

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With the caveat that I understand nothing of the actual mechanics of filing a 1040, I think your father is making a lot of sense. Do it now so that no matter what happens, the bigger chunk of money is safe. It's likely not going to be a fast process, even if you file electronically. You also have no idea how long it's going to take to get an SSN for your third child, given the pandemic and all that. After that it should be relatively simple to file an amended return.

And if your father is offering to have his accountant take care of it for you, not a bad deal either. All he really needs is everyone's name, date of birth and SSN, I expect. (In general you'd be advised to beware of US-based accountants who aren't well-versed in the intricacies and idiosyncracies of non-resident expat taxes, but in your case it will be extremely simple: zero income and no assets to declare.)
 

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popcas -- I would totally disagree with the accountant, for all the reasons stated earlier in this thread. First, I take you as a pretty "smart cookie," as such, you can do this yourself, without paying an accountant's fees. As per the information from your father's accountant:

1) "There is no need to file an extension to 15th October as its automatic." This is absolutely not true! There is an automatic extension from 15 April to 17 May, but anything further, you need to file for the "automatically approved extension" or utilize the 15 Jun extension for overseas filers. There is an additional extension that "Moulard" from this forum has delineated, in the past, that requires a letter request to the IRS. So if the accountant prepares the return and you file it expeditiously, you'll be on-time, without an extension. Of course, as stated before, the penalty for late filing is a percentage of taxes owed, so zero, in your case.

2) "We need to complete the tax return asap as the stimulus checks can be withdrawn at any time. Don't lose $8200 for the sake of an extra $2500." This is absolute "hogwash." There are no stimulus payments to withdraw. The so called stimulus payments are an advance of your "Recovery Tax Credit." At this point, you are getting a tax refund equal to the "advances" citizens who were already in the system, got advanced. There have been shortages of moneys to fund PPP & EIDL loans, but this doesn't affect you.

3) "There is no point waiting for my third child SSN, he can always file an amended return when we get it. (isn't this messy?)" Yes, you can pay an accountant extra fees to file an amended return, but unless you need the money now, why? And yes, this can get a little messy, if you need to file an amended return, but even that isn't that difficult.

Your statement: "So my plan was to follow the great advice on here. File an extension using form 4868 to take my filing deadline to 15 October and then try and get my third child SSN and then submit my tax return and apply for the Recovery Rebate as part of my return for the stimulus checks." still seams to be the best plan, but I would "get on it."

In the end you'll get the same result (except, of course, you, or your father, will be out the accountant's fees, x2.) The original path gets you in the system, to be able to continue future child stimulus payments (scuttlebutt is they'll start in July.) Either way, your first step is to register your last child's birth with the Embassy and fill out the application for a SSN, if you haven't done so already. The accountant surely will file your return(s) electronically, thus allowing you to capture your return expeditiously. Remember that these stimulus payments are only advances to a tax credit -- you'll have to "settle-up" with the IRS when you file your annual returns.

Remember, the first two tranches of stimulus payments were advances to the 2020 tax credit. The third will be for 2021 (they're still pushing these out.)

Yes, your father's accountant appears to pushy -- these returns do not require much work (mostly zeros) -- I hope your father is getting a discount. I postulate that your father is not knowledgeable, at all, in this situation and has relied on his accountant's expertise for a long time. With that said there are a couple of reasons to let you Dad "win" on this one (remember, he only has his little girl's "best interests at heart,") especially, if he's footing the bill:

a. The accountant will invariably file electronically -- expediting your refund. The accountant's signature also provides a bit of audit protection.

b. Keep peace in the family and let your father do what he lives for -- helping you. Especially, since you live afar, and he may not have as much opportunity to help you or his grandchildren as he could if you lived nearby.

Whichever way you go, you'll be signing the tax returns (or electronic signing them,) so you need to keep track of the numbers (which you've already on top of, above.) Just remember to file a 1040-X, to add you're third child, as soon as you can (to get him in the system for future advances,) if you go with your father's plan. Cheers, 255
 

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Beat me to it 255. I got as far as typing "the accountant is patently wrong"...and you saved me the effort of basically typing out what you wrote :)
 

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Discussion Starter · #26 ·
I had a quick look at form 1040 - my status would be "Married Filing Separately" - but before I could file I would need to get an ITIN number for my Husband using form W-7?

How long does that take to process?

Does my husband need to inform the HMRC as in the W-7 form it asks for his Uk Tax identifier number which I assume is the Nat Ins number we use in the UK.
 

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Discussion Starter · #27 ·
Either way, your first step is to register your last child's birth with the Embassy and fill out the application for a SSN, if you haven't done so already.
I am at the behest of the US Embassy in London. I have to wait until they are open to accept a CRBA for non urgent travel and they will process the birth cert and SSN at the same time - it took about 4 weeks a few years ago but I suspect with Covid expect that to be double that. If in the UK everyting is opening up Late June - I don't expect to have the SSN before Mid to late August at the earliest.

Remember that these stimulus payments are only advances to a tax credit -- you'll have to "settle-up" with the IRS when you file your annual returns.
Does this mean that if I ever become a tax payer - these advance tax credits that I am receving now will not be available to me. Makes sense.
Remember, the first two tranches of stimulus payments were advances to the 2020 tax credit. The third will be for 2021
If the third is for the year 2021 do I still claim that in my tax return for 2020 as its given in advance?

I hope your father is getting a discount.
I don't know but could you hazard a guess at what someone would charge to complete my tax return?
With that said there are a couple of reasons to let you Dad "win" on this one (remember, he only has his little girl's "best interests at heart,") especially, if he's footing the bill:
He will foot the bill but neither do I want him to be taken advantage of. My father came to visit us a few years back and over dinner we had a friend come over who is GP, my father was talking about his health and medical issues whilst gushing about his Dr who he had been seeing over the last 10 years on a regular basis. My GP friend abruptly asked him, why hasn't he been assessed for a low thyroid as it seemed to him to be the most obvious cause of his problems. On his return to the US, my father duly asked his Dr to get his thyroid levels checked and low and behold, he had an underactive thyroid that had been misdiagnised for so long.

So I agree I will likely let him win on this if his accountant is being fair, I know he has my best interests at heart. My husband has made it abundantly clear - he won't get involved - :D
 

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I had a quick look at form 1040 - my status would be "Married Filing Separately" - but before I could file I would need to get an ITIN number for my Husband using form W-7?
If your spouse is not a US person there is no need for an ITIN.

per the instructions...

Married Filing Separately
.... If your spouse doesn’t have and isn’t required to have an SSN or ITIN, enter “NRA.”
 

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popcas -- Moulard answered your first question. Assuming you're filing "Married, Filing Separately," your husband would have no reporting requirement to the U.S. nor the UK. He is just not part of the equation.

You should check back with the Embassy, it appears they are open, by appointment. To your other questions, in turn:

a. You are a taxpayer now! Just because you have been under the reporting thresholds before, with zero income, doesn't relieve you of the fact that you are a U.S. taxpayer. As far as the current COVID related tax credits, they explicitly include low and even zero earners. If you received a paying job, in the futures, the tax credits would reduce income taxes owed. In the past there were minimum earnings necessary for the child tax credit, but that has been removed. None of us know what the future will bring, but as of now, the credits are available for you as a U.S. citizen to take advantage of (of course unless your potential future income exceed the maximum amount of income to qualify for the credits.) As of now, all of these credits are temporary (there are proposals to make the child tax credit permanent.)

b. Only the first two tranches are on the worksheet for 2020 -- the third tranche (and any future child stimulus payments for 2021) will be settled with your 2021 income tax submission.

c. My brother-in-law just relayed to me that H&R Block (a U.S. tax preparation firm, not necessarily a CPA, that his parents had used "forever") charged him $300.00 to complete their return and they owed zero tax, their only income is social security, well under the standard deduction. He'll never do that again! My mother routinely paid her CPA $500.00 (with me doing all the prep. work.) There are tax preparation firms that will charge a small fee to review and electronically file a return, for as little as $25.00. I've seen tax prep. fees in the thousands (a lot of people think they are getting a superior result, if they pay more.) My daughter does income taxes, as a side hustle, and she routinely charges $150.00, for a "basic" return. The last few years, she had to pay $60.00 per return to file electronically. This year she changed software firms and paid a flat $950 to file up to 100 clients returns. My guess is that your father's CPA will charge about $500.00 per return, although it will be "whatever the market will bear," in his location. NYC CPAs will charge more than CPAs in Laredo, TX My son has very complicated returns and he routinely pays $2-3000.00 per year. CPA fees are all over the map.

d. I think $150.00, for each of your "simple" returns would be fair. I certainly wouldn't pay more than $200.00, knowing he has charges to file electronically. After all, he is only completing one worksheet and filing in one line on your return. Cheers, 255
 

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Discussion Starter · #30 ·
c. My brother-in-law just relayed to me that H&R Block (a U.S. tax preparation firm, not necessarily a CPA, that his parents had used "forever") charged him $300.00 to complete their return and they owed zero tax, their only income is social security, well under the standard deduction. He'll never do that again! My mother routinely paid her CPA $500.00 (with me doing all the prep. work.) There are tax preparation firms that will charge a small fee to review and electronically file a return, for as little as $25.00. I've seen tax prep. fees in the thousands (a lot of people think they are getting a superior result, if they pay more.) My daughter does income taxes, as a side hustle, and she routinely charges $150.00, for a "basic" return. The last few years, she had to pay $60.00 per return to file electronically. This year she changed software firms and paid a flat $950 to file up to 100 clients returns. My guess is that your father's CPA will charge about $500.00 per return, although it will be "whatever the market will bear," in his location. NYC CPAs will charge more than CPAs in Laredo, TX My son has very complicated returns and he routinely pays $2-3000.00 per year. CPA fees are all over the map.

d. I think $150.00, for each of your "simple" returns would be fair. I certainly wouldn't pay more than $200.00, knowing he has charges to file electronically. After all, he is only completing one worksheet and filing in one line on your return. Cheers, 255
Thanks so much 255. I really appreciate your help, I hope others in similar position can take your advice as well.
 

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Discussion Starter · #32 ·
Don't expect speedy service on that CRBA or SSN:

Tell me about it. I have been on the London Embassy website everyday for over 6 months. I think there are many in this situation. We were planning to travel to the US in the summer - so it's a waiting game.
 

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Tell me about it. I have been on the London Embassy website everyday for over 6 months. I think there are many in this situation. We were planning to travel to the US in the summer - so it's a waiting game.
You should be able to use a UK passport for the newest arrival. Not strictly kosher but as long as it gets you on the plane, you can probably deal with any fallout after arrival. The whole US citizens must use US passports thing is a bit overblown - spoken as a dual citizen who's had very little trouble crossing the border using a Canadian passport with US birthplace.
 
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