Filing Us Tax Returns

[ChiangMaiThai]

I haven't filed for a few years. Have been in Thailand that whole time. I don't make enough to have to pay taxes in the US, but I know I am supposed to file. I plan on filing every year here on out.

1. To file for this last year, do I simply fill out this form Earned Income Exclusion 2555 or do I need to fill out a 1040 too?

2. If I file for this last year, but don't mention anything about the past 3 years, am I asking for trouble?

Thanks!

[Deah]

If your earning income from the US, you should search www.irs.gov to see if you are required.. I know that if you earn under a certain amount you don't have to do anything, but i am not sure how much that is.

and yes, before you file 2008 taxes, you need to do 2007's also...

[ChiangMaiThai]

I don't earn any income from the US. So I need to do 2005,2006,2007,2008 all at once? I was in Thailand the whole time, not making enough to have to pay... Just didn't file.

[stevehaigh]

you always have to do a 1040 i believe and a 2555 if you have foreign earned income. i believe you are required to file a tax return every year if you have an SS# even if you have no income, but if reporting no income for the past X years, it would be hard for them to penalize you i think

[TerryLH]

Use the tax info book, and see if in your situation you are required to file. Not everyone is.

You can file for 2008 without doing the other years. It might raise a red-flag, but then again it might not.

You can download the entire tax book and also forms from the irs site.

1040 and 2555EZ, if in fact you do need to file.

[Jingthing]

i believe you are required to file a tax return every year if you have an SS# even if you have no income

That is completely false.

[ChiangMaiThai]

i believe you are required to file a tax return every year if you have an SS# even if you have no income

That is completely false.

Are you sure? For instance, when I was studying for my Master's and not working, should I have filed or not? When I was lying on the beach in Thailand for a year, should I have filed or not?

I guess I need an accountant...

[Jingthing]

I am 100 percent certain that not all Americans must file every year even those with some income. Whether YOU need to file or not is something you are going have to determine by reading the info at irs.gov or consulting an expert.

Edited April 1, 2009 by Jingthing

[SoCal]

All U.S. citizens and residents who earn more than $8,450 (single) or $16,900 (married filing joint) in a year must file a U.S. personal income tax return - no matter where you live. If you are a U.S. citizen living outside the the U.S., failing to file a U.S. tax return can result in the loss of your Foreign Earned Income Exclusion, and thus be a very costly mistake for you.

For more info: http://www.ruschlaw.com/expat.htm

Personally I would always file, as they only have 3yrs to audit you from the date you file the return, and can always audit you for years that are not filed.

[Jingthing]

Good info, SoCal, except for one point. The IRS expressly requests that you DO NOT FILE if you are not required to file. It costs the taxpayers money to process such pointless returns.

[ChiangMaiThai]

All U.S. citizens and residents who earn more than $8,450 (single) or $16,900 (married filing joint) in a year must file a U.S. personal income tax return - no matter where you live. If you are a U.S. citizen living outside the the U.S., failing to file a U.S. tax return can result in the loss of your Foreign Earned Income Exclusion, and thus be a very costly mistake for you.

For more info: http://www.ruschlaw.com/expat.htm

Personally I would always file, as they only have 3yrs to audit you from the date you file the return, and can always audit you for years that are not filed.

Is the burden on the tax payer or the government to prove that income was above $8,450?

And do you mean that even if you make less than this, as long as you live outside the US, you must file a return? Or does the same rule apply no matter where you live?

[Jingthing]

If you don't file a return and IRS has reason to believe you should have filed a return, you will hear from them.

I'll give you an example. Say I sell 20,000 dollars in stock and IRS knows about it, but I know that the taxable profit was only 10 cents. In that case, I will file, because IRS doesn't know whether it was enough profit to put me into a must file category.

[SoCal]

Good info, SoCal, except for one point. The IRS expressly requests that you DO NOT FILE if you are not required to file. It costs the taxpayers money to process such pointless returns.

As long as you do not file for a given year, it is open for audit (10yrs?) Once you file, they only have 3yrs to audit you.

Reason enough for me to file, and the government crying about spending really falls on deaf ears.

How you want to file is up to you.

[SoCal]

Is the burden on the tax payer or the government to prove that income was above $8,450?

And do you mean that even if you make less than this, as long as you live outside the US, you must file a return? Or does the same rule apply no matter where you live?

I would think it is a bit of both. Imagine all they have to do is call into question how you maintain your living standard.

No, it doesn't matter where you live. Make less than those amounts, and you are not required to file.

I just think it a good idea to file, and decrease your future exposure to being audited. That is my personal view though, and you are under no constraint to agree.

[OriginalPoster]

All U.S. citizens and residents who earn more than $8,450 (single) or $16,900 (married filing joint) in a year must file a U.S. personal income tax return - no matter where you live. If you are a U.S. citizen living outside the the U.S., failing to file a U.S. tax return can result in the loss of your Foreign Earned Income Exclusion, and thus be a very costly mistake for you.

For more info: http://www.ruschlaw.com/expat.htm

Personally I would always file, as they only have 3yrs to audit you from the date you file the return, and can always audit you for years that are not filed.

Is the burden on the tax payer or the government to prove that income was above $8,450?

And do you mean that even if you make less than this, as long as you live outside the US, you must file a return? Or does the same rule apply no matter where you live?

Best advice that you got in this thread is to talk to a tax pro. Jingthing's right though, you aren't required by law to file if your income is below a certain threshold and you neither owe taxes nor are due a refund.

"Burden of proof" of your earnings being less than $8450 a moot point unless you're a tax activist who is unwilling to file for political reasons. Just by filing you get a foreign income exclusion of $87,000 and unless the IRS has some plausible reason to beleive that you're earning that magnitude of money they're unlikely to try to make you prove otherwise. If you're not making $8450 per year, I doubt that they IRS is going to think that you're really making $87K unless they have some tangible evidence of fraud. Don't file though, and you don't get that $87K shelter, plus, the clock never starts ticking on the IRS's 3 year time limit to challenge your numbers.

Edited April 1, 2009 by OriginalPoster

[noahvail]

All U.S. citizens and residents who earn more than $8,450 (single) or $16,900 (married filing joint) in a year must file a U.S. personal income tax return - no matter where you live. If you are a U.S. citizen living outside the the U.S., failing to file a U.S. tax return can result in the loss of your Foreign Earned Income Exclusion, and thus be a very costly mistake for you.

For more info: http://www.ruschlaw.com/expat.htm

Personally I would always file, as they only have 3yrs to audit you from the date you file the return, and can always audit you for years that are not filed.

Is the burden on the tax payer or the government to prove that income was above $8,450?

And do you mean that even if you make less than this, as long as you live outside the US, you must file a return? Or does the same rule apply no matter where you live?

Best advice that you got in this thread is to talk to a tax pro. Jingthing's right though, you aren't required by law to file if your income is below a certain threshold and you neither owe taxes nor are due a refund.

"Burden of proof" of your earnings being less than $8450 a moot point unless you're a tax activist who is unwilling to file for political reasons. Just by filing you get a foreign income exclusion of $87,000 and unless the IRS has some plausible reason to beleive that you're earning that magnitude of money they're unlikely to try to make you prove otherwise. If you're not making $8450 per year, I doubt that they IRS is going to think that you're really making $87K unless they have some tangible evidence of fraud. Don't file though, and you don't get that $87K shelter, plus, the clock never starts ticking on the IRS's 3 year time limit to challenge your numbers.

I'm a week late in reading this, but here goes: Jingthing is correct about the exclusion, and not needing to file. The 3-year limit is statutory; but "if Uncle even sniffs fraud, the IRS can go back to D-Day or the day you were born, whichever comes first."

In my case, I have two sources of income: private disability which, because the policy was bought with after-tax dollars, is non-taxable; and SSDI which, because it is so small, leaves me below the threshold. Therefore, I do not file. But last year, when the $300 economic stimulus package was released, I filed for the prior year, requested the refund, and got the check. No questions, as there shouldn't have been. Hope that helps.

[PeaceBlondie]

You have to file a return on Form 1040 and 2555 in order to claim the Foreign Income Exclusion. Generally, there is a three year limit for claiming a refund and you should not let three years pass if you earn foreign income. If you were liable for tax for 1949 and never filed, you are still liable for the tax.

[OriginalPoster]

All U.S. citizens and residents who earn more than $8,450 (single) or $16,900 (married filing joint) in a year must file a U.S. personal income tax return - no matter where you live. If you are a U.S. citizen living outside the the U.S., failing to file a U.S. tax return can result in the loss of your Foreign Earned Income Exclusion, and thus be a very costly mistake for you.

For more info: http://www.ruschlaw.com/expat.htm

Personally I would always file, as they only have 3yrs to audit you from the date you file the return, and can always audit you for years that are not filed.

Is the burden on the tax payer or the government to prove that income was above $8,450?

And do you mean that even if you make less than this, as long as you live outside the US, you must file a return? Or does the same rule apply no matter where you live?

Best advice that you got in this thread is to talk to a tax pro. Jingthing's right though, you aren't required by law to file if your income is below a certain threshold and you neither owe taxes nor are due a refund.

"Burden of proof" of your earnings being less than $8450 a moot point unless you're a tax activist who is unwilling to file for political reasons. Just by filing you get a foreign income exclusion of $87,000 and unless the IRS has some plausible reason to beleive that you're earning that magnitude of money they're unlikely to try to make you prove otherwise. If you're not making $8450 per year, I doubt that they IRS is going to think that you're really making $87K unless they have some tangible evidence of fraud. Don't file though, and you don't get that $87K shelter, plus, the clock never starts ticking on the IRS's 3 year time limit to challenge your numbers.

I'm a week late in reading this, but here goes: Jingthing is correct about the exclusion, and not needing to file. The 3-year limit is statutory; but "if Uncle even sniffs fraud, the IRS can go back to D-Day or the day you were born, whichever comes first." (quote from an excellent tax accounting teacher way back when - the advice still applies.)

In my case, I have two sources of income: private disability which, because the policy was bought with after-tax dollars, is non-taxable; and SSDI which, because it is so small, leaves me below the threshold. Therefore, I do not file. But last year, when the $300 economic stimulus package was released, I filed for the prior year, requested the refund, and got the check. No questions, as there shouldn't have been. Hope that helps.

It's true that the 3 year limit doesn't apply to cases, but based only upon what the OP said in this thread it didn't sound like we was doing anything fraudulent.

But doesn't the IRS need to do more than "sniff" fraud to hold you liable for Income Taxes owed in tax years for which you filed more than 3 years ago? Sure, they can investigate you, but to collect taxes evaded via a more than 3-year old fraud, don't they need to actually prove fraud?

Edited April 10, 2009 by OriginalPoster

[SoCal]

You have to file a return on Form 1040 and 2555 in order to claim the Foreign Income Exclusion. Generally, there is a three year limit for claiming a refund and you should not let three years pass if you earn foreign income. If you were liable for tax for 1949 and never filed, you are still liable for the tax.

PB,

My understanding is that if you are audited, you automaticaly lose the ability to claim the Foreign Income Exclusion for any year other than the current filing year.

[tangoll]

How many of you expat US citizens file the US Treasury form due 1 June about bank or other security accounts that you control or have signature authority over, if account had at any time of the year over US$10K balance? It's required, but I wonder how many IRS filers actually file this Treasury form.

[OriginalPoster]

How many of you expat US citizens file the US Treasury form due 1 June about bank or other security accounts that you control or have signature authority over, if account had at any time of the year over US$10K balance? It's required, but I wonder how many IRS filers actually file this Treasury form.

I suspect that you are correct that many people who are supposed to file that form do not realize it.