Step 2: Determine My Requirement To File

By: Pete
Date posted: 11.03.2011 (10:35 am) | Write a Comment  (0 Comments)

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After receiving an answer from the IRS in step 1 (yyy), I am now ready to take action on the list of things that the IRS told me I was required to do. The first step was to actually determine if I am required to file. I am fairly convinced that I do need to but I will obviously make sure.  From the email, I was told:

“To determine your  Requirement to File , you will need to know the answers to the following questions:

1. What is/was your marital status at the end of the tax year?,
2. What is/was your “Filing Status”?,
3. What are the types and amounts of your World Wide income?,
4. Were you age 65 years or older?, and
5. Were you claimed as a dependent on another U.S. Federal income tax return?.

To determine the requirement to file, you should review each year the Requirements to File tables located in Chapter 1 (Filing Information) of Publication 54 (Tax Guide for U.S. Citizens and Resident Aliens Abroad).”

I do have the answers to all of those questions and the publication that the IRS is talking about is actually online (as is everything else from what I understand, you can see it at: http://www.irs.gov/publications/p54/ch01.html

To start off, I will be reporting my taxes for 2010, and then do earlier years if required or advised to do so. Otherwise I would go from there and then once I have 6 years filed, I would be 100% compliant.

Criteria: My Gross Global income as a Head of Household was over $12,050 USD. I did get married last year but this documents seems to be looking at our status at year end. If I was anywhere near that number, I would be looking into what exactly is included in that income but I’m not, so I can move on.

When to file and pay? Well, I am obviously very late on the April 15 deadline, hopefully it will be the last time! There is talk of delays and interests charged on payable taxes. I do not expect to have anything so I will not worry about this part. As for asking for an extension, I am so late by now and do expect to file soon, that I will personally work on filing my taxes rather than asking for an extension.

Income In A Foreign Currency: (IRS link) This is a big point and with no surprise, it states that all income and expenses must be translated to US dollars. That makes sense, I am not certain however which rate I would be using. I would assume that the average rate for that year would make the most sense but hopefully there will be more information about this down the road.

Blocked Income & Fulbright Grant: I do not have any “blocked income” that can be converted into US dollars.

Where and How To File: It seems as though filing electronically is the easiest (makes sense), I’m assuming much more information will come regarding that part.

From the IRS website:

“If any of the following situations apply to you, file your return with the:

Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215

  • You claim the foreign earned income exclusion.
  • You claim the foreign housing exclusion or deduction.
  • You live in a foreign country.”

My Wife: From reading the IRS page, I do have options regarding filing (or not) for my wife and for now, I will try to stay simple and not file for her. That becomes the “default choice” until I suspend that decision.

http://www.irs.gov/publications/p54/ch01.html


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