Tax filing for 2014. FBAR and all the other fun.

[watcharacters]

Greetings,

Just picking up the pieces so to speak. Last year TV member connda did a great job of posting about the matters of filing taxes as an expat. I'd like to pick up the pieces for tax year 2014. FBAR, CEN and etc.

I've only just begun the whole process of taxes with this post although I've known my tax information has been available since Feb. 14. I let it go for a reason as Im doing my taxes myself for the first time in 40 years. I'll use Turbo Tax® this time as I've given up on the CPA I used for the last 5 years.

I hope this can be a thread for the exchange of information.

I also hope this thread doesn't become an American bashing thread but rather an addressing of the responsibilities and matters pertaining to all US citizens regarding the filing of state and federal USA taxes. Exceptions exist, but in general Americans have a continuing tax obligation and I for one don't contest that.

[watcharacters]

I'll start off with this but hope for some simplification.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR

The laws change and I'm not sure which is the latest form to use.

Edited February 22, 2015 by watcharacters

[55Jay]

To start at the top - DIY Software selection.

I've been on TurboTax for years, but appears the Schedules and Forms I need (probably same as many here need) are pushed into the "Premier" range, now @ $89.99! It's not really the money but they've finally pushed my internal price point/value button.

I've been reading and comparing the past few hours and have decided to give TaxAct a try. The Deluxe version says it includes the Schedules and Forms I need for a very reasonable $12.00; and also says it can import past year TurboTax files.

Edited February 22, 2015 by 55Jay

[lopburi3]

1. The FBAR is done online if required (10k USD value at any time during the year as total in foreign accounts). Many or us do not need to file if only bring in funds as needed.

http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

2. TaxAct is easy to use with foreign address and have been using for more than a decade. Do the on-line version now and have no State Tax being from Florida. Import of previous years information helps keep track of IRA/retirement tax free amounts so well worth the $10 or so I spend each year for the software/online filing.

[maphraw]

Can you get all of the forms (2555, 8938) that an epat needs to file from TaxACT? I have been using TurboTax but some issue always seems to surface that is not clearly explained by them. PC News evaluated the major online tax preparation services and they gave TaxACT the best review based on cost, reliability, ease of use, tax payer guidance.

TaxACT Deluxe 2015 (Tax Year 2014) - PC Magazine

www.pcmag.com/article2/0,2817,2475881,00.asp

[lopburi3]

I have not required any special forms but suspect they would be available. It does not cost anything to try it out AFAIK - just open account and go through the entry of information on secure server - printout is also free I believe if you want to file by mail.

[55Jay]

Can you get all of the forms (2555, 8938) that an epat needs to file from TaxACT? I have been using TurboTax but some issue always seems to surface that is not clearly explained by them. PC News evaluated the major online tax preparation services and they gave TaxACT the best review based on cost, reliability, ease of use, tax payer guidance.

TaxACT Deluxe 2015 (Tax Year 2014) - PC Magazine

www.pcmag.com/article2/0,2817,2475881,00.asp

Looking at the TaxAct.com homepage, click on "learn more" link for a particular product, and it will open a page showing all the forms and schedules included. I checked the Free Online version and saw the 2555 and 8938 were listed.

[maphraw]

Instructions for filing Form 8398 from the IRS Married taxpayers filing a joint income tax return.

If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.

I googled Form 8398 IRS and got the above information. I was led to believe that I had to report all foreign bank account interest and brokerage interest and dividends no matter what the amount. But according to the IRS, I don't have to bother since I am way under the reporting threshold of $400,000. Maybe I am missing something. Last year I had an accountant in Bangkok do my US taxes, at considerable expense, and he included all of my interest from my Thai banks and mutual fund stuff but it appears, based on the above information, that it was unnecessary. Any comments?

[lopburi3]

Tax and reporting of assets are two separate issues - you report income earned anywhere on US tax return but this would not be reported as assets on 8398 unless you meet the reporting minimum. But also remember you also have FBAR report due for any total assets equal to 10k USD or more on any calendar year day. Most people that have to make a report will only have to make the on-line FBAR.

[55Jay]

What exchange rate do you use for Baht to Dollar for taxes? I've read it on TVF before, but can't remember if it's the rate on 31DEC, or if you use an IRS provided rate, such as this table http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates

IRS' 33.8 seems too high though. From what I can see on XE charts, the Baht hit 33.0x only briefly in December 2014. On 31DEC, it was 32.8.

Using 12 monthly averages from X-rate.com, I came up with 32.4xx to the Dollar for 2014.

[lopburi3]

For tax I have always used the exchange rate on date of payment (only have bank interest so easy that way) using OANDA. Believe any legit such rate is accepted. Agree that above web site makes no sense with the high 33.xxx exchange rate.

See 32.92 listed as December 31 rate on official web site.

http://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/currentRates.htm

[55Jay]

For tax I have always used the exchange rate on date of payment (only have bank interest so easy that way) using OANDA. Believe any legit such rate is accepted. Agree that above web site makes no sense with the high 33.xxx exchange rate.

See 32.92 listed as December 31 rate on official web site.

http://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/currentRates.htm

Thought I've seen some rule or rule of thumb on this in the forum before. At any rate, me like 32. anything more than 33.8. Thanks again.

[lopburi3]

Believe the FBAR report requires the yearly rate - for tax you can use normal daily rates of major source such as OANDA or XE for actual receiving date.

[longball53098]

I use this site for the FOREX rates for Thailand when doing taxes and Fbar

http://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/currentRates.htm

[watcharacters]

To start at the top - DIY Software selection.

I've been on TurboTax for years, but appears the Schedules and Forms I need (probably same as many here need) are pushed into the "Premier" range, now @ $89.99! It's not really the money but they've finally pushed my internal price point/value button.

I've been reading and comparing the past few hours and have decided to give TaxAct a try. The Deluxe version says it includes the Schedules and Forms I need for a very reasonable $12.00; and also says it can import past year TurboTax files.

I used an EA for many years and then he died. The CPA I used thereafter was fine for some years and then seemed to develop little interest in his job.

In the final analysis I suspect many if not most EA's and CPA's use some form of online tax software if not for complete preparation than at least possibly for double checking.

My situation is really not complicated and over the years, I think the most I ever paid was possibly 400 USD for my tax preparation.

I just don't want to put a target on my back at any time. I just want to finish it correctly and in a timely manner.

Edited February 26, 2015 by watcharacters

[JimGant]

I've been on TurboTax for years, but appears the Schedules and Forms I need (probably same as many here need) are pushed into the "Premier" range, now @ $89.99! It's not really the money but they've finally pushed my internal price point/value button.

Yeah, me too. HR Block got clever, and offered TurboTax Deluxe buyers a free copy of their Deluxe version (which has all the forms I need). They were actually aiming at folks who'd already bought this year's TT Deluxe -- and wanted a receipt as proof. I hadn't yet bought it, but I applied at HR Block using last year's TT Deluxe receipt. No problem. Got an email with instructions, then downloaded the HR Block software.

Like TaxAct, it too will import the previous year's TT boilerplate info (if it didn't, I would have paid for TT to avoid all those keystrokes).

It's a little clunkier than TT (but the price was right). On my mom's State taxes, where I had to enter some Trust K-1 info, it choked (historically, TT accepted this info no sweat). It does have a nice override system, which I had to use. But overriding voids the ability to file electronically. However, this being a State return, there's no free efile option for State, unlike for Federal (TT too charges for State efile). So, a lot cheaper to print it out and mail it in. Which I did.

I hope the marketing honcho at HR Block got a raise (and that his equivalent at TT is on the street).

[55Jay]

I've been on TurboTax for years, but appears the Schedules and Forms I need (probably same as many here need) are pushed into the "Premier" range, now @ $89.99! It's not really the money but they've finally pushed my internal price point/value button.

Yeah, me too. HR Block got clever, and offered TurboTax Deluxe buyers a free copy of their Deluxe version (which has all the forms I need). They were actually aiming at folks who'd already bought this year's TT Deluxe -- and wanted a receipt as proof. I hadn't yet bought it, but I applied at HR Block using last year's TT Deluxe receipt. No problem. Got an email with instructions, then downloaded the HR Block software.

Like TaxAct, it too will import the previous year's TT boilerplate info (if it didn't, I would have paid for TT to avoid all those keystrokes).

It's a little clunkier than TT (but the price was right). On my mom's State taxes, where I had to enter some Trust K-1 info, it choked (historically, TT accepted this info no sweat). It does have a nice override system, which I had to use. But overriding voids the ability to file electronically. However, this being a State return, there's no free efile option for State, unlike for Federal (TT too charges for State efile). So, a lot cheaper to print it out and mail it in. Which I did.

I hope the marketing honcho at HR Block got a raise (and that his equivalent at TT is on the street).

Yes, TT Marketing VP has gotten quite the red arse the past month or so out in internet land.

Almost got flipped to H&R at the last minute yesterday, then decided to run online returns on both TaxAct and H&R.

Came out exactly the same, so I paid 12 bucks to EFile theTaxAct Deluxe return, and deleted my H&R account.

Subtle differences but if pressed, I would side with TaxAct's interface over H&R's.

[usnftcret]

Instructions for filing Form 8398 from the IRS Married taxpayers filing a joint income tax return.

If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.

I googled Form 8398 IRS and got the above information. I was led to believe that I had to report all foreign bank account interest and brokerage interest and dividends no matter what the amount. But according to the IRS, I don't have to bother since I am way under the reporting threshold of $400,000. Maybe I am missing something. Last year I had an accountant in Bangkok do my US taxes, at considerable expense, and he included all of my interest from my Thai banks and mutual fund stuff but it appears, based on the above information, that it was unnecessary. Any comments?

Most folks online due to ignorance confuse the FBAR and FACTA requirements for US taxpayers. FBAR does not affect 99% of US taxpayers living overseas.

[Tywais]

Instructions for filing Form 8398 from the IRS Married taxpayers filing a joint income tax return.

If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.

I googled Form 8398 IRS and got the above information. I was led to believe that I had to report all foreign bank account interest and brokerage interest and dividends no matter what the amount. But according to the IRS, I don't have to bother since I am way under the reporting threshold of $400,000. Maybe I am missing something. Last year I had an accountant in Bangkok do my US taxes, at considerable expense, and he included all of my interest from my Thai banks and mutual fund stuff but it appears, based on the above information, that it was unnecessary. Any comments?

FBAR does not affect 99% of US taxpayers living overseas.

I believe you have that reversed. FBAR is required for any amount over $10,000 in total at any time during the year in a foreign account. Any US retirement individual using the 800k in the bank will be required to submit. Looking at the comparison of the Form 8938 and FBAR I'm a bit confused about the 8938 as I've never submitted one but always have filed an FBAR.

[JimGant]

I'm a bit confused about the 8938 as I've never submitted one but always have filed an FBAR.

First off, maphraw's accountant did NOT file a Form 8938 last year -- he corrected this fact in another thread.

And while FBARs have been around many years, the Form 8938 is just a few years old, courtesy of the FATCA legislation. And, yes, most (all?) reading this won't have assets that trigger its filing -- unless, perhaps, you still have a foot in the States, whereby the filing thresholds are $50k/100K filing single/married. (But still 5 times higher than the FBAR threshold.)

Designated assets have to be listed -- and if those assets are income producing, that income also has to be listed on the Form 8938, as well as Schedule B. And both forms attached to your Form 1040 (unlike FBAR).

Why list the identical income on two forms filed together? Who knows. And why list non income producing assets on Form 8938, since FATCA is only after folks hiding foreign income? Who knows. And why have a FBAR threshold of $10k when the Treasury folks who wrote FATCA realized $50k is a much more reasonable lowest end threshold? Well, because the FBAR requirement, and its $10k, has been around for years (with no adjustment for inflation). Blame bureaucratic inertia -- and because FBAR and FATCA forms are managed by different offices in Treasury. Thus, IRS and FinCEN fiefdoms. No, the FBAR requirement has been overcome by FATCA, whereby the Form 8938 can give the Feds all the info required in a FBAR report -- at a much more realistic threshold. Madness.

There, I feel better.

[taxout]

The IRS largely blames the dual filing requirement on Congress:

"Congress enacted both the Title 31 and the Title 26 provisions regarding the reporting requirements of the FBAR and Form 8938. Reporting on the FBAR is required for law enforcement purposes under the Bank Secrecy Act, as well as for purposes of tax administration. As a consequence, different policy considerations apply to Form 8938 and FBAR reporting. . . . These differing policy considerations were recognized by Congress during the . . . enactment of Section 6038D [imposing Form 8938]. Congress’s intention to retain FBAR reporting requirements, notwithstanding the enactment of section 6038D, was specifically noted in the Technical Explanation . . . Against this background, reporting on the Form 8938 and on the FBAR is not duplicative and both forms must be filed, if required."

http://www.gpo.gov/fdsys/pkg/FR-2014-12-12/pdf/2014-29125.pdf

[JimGant]

The IRS largely blames the dual filing requirement on Congress:

Appropriate, considering that Congress has been completely dysfunctional now for some time.....

[watcharacters]

What exchange rate do you use for Baht to Dollar for taxes? I've read it on TVF before, but can't remember if it's the rate on 31DEC, or if you use an IRS provided rate, such as this table http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates

IRS' 33.8 seems too high though. From what I can see on XE charts, the Baht hit 33.0x only briefly in December 2014. On 31DEC, it was 32.8.

Using 12 monthly averages from X-rate.com, I came up with 32.4xx to the Dollar for 2014.

USD BAHT 2014.JPG

I thought the Treasury Dept. was a little less than fair to come up with an official/approved FBAR exchange rate USD/THB of 32.92. But that's what it is and so be it.

Maybe they use forex rates or something like that.

A week ago, I just wired cash from the USA to Thailand and the final rate was 32.4 minus fees of 1034 THB for the transaction on the Thai bank side. The wire cost me 25 USD on the stateside end.

I'd love to get 32.9 but...

[Gumballl]

What exchange rate do you use for Baht to Dollar for taxes? I've read it on TVF before, but can't remember if it's the rate on 31DEC, or if you use an IRS provided rate, such as this table http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates

IRS' 33.8 seems too high though. From what I can see on XE charts, the Baht hit 33.0x only briefly in December 2014. On 31DEC, it was 32.8.

Using 12 monthly averages from X-rate.com, I came up with 32.4xx to the Dollar for 2014.

USD BAHT 2014.JPG

I thought the Treasury Dept. was a little less than fair to come up with an official/approved FBAR exchange rate USD/THB of 32.92. But that's what it is and so be it.

Maybe they use forex rates or something like that.

A week ago, I just wired cash from the USA to Thailand and the final rate was 32.4 minus fees of 1034 THB for the transaction on the Thai bank side. The wire cost me 25 USD on the stateside end.

I'd love to get 32.9 but...

I recommend that in the future, you send money via SWIFT, from your US bank to account at Bangkok Bank. My cost, when I do such, is a mere $3.

[watcharacters]

What exchange rate do you use for Baht to Dollar for taxes? I've read it on TVF before, but can't remember if it's the rate on 31DEC, or if you use an IRS provided rate, such as this table http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates

IRS' 33.8 seems too high though. From what I can see on XE charts, the Baht hit 33.0x only briefly in December 2014. On 31DEC, it was 32.8.

Using 12 monthly averages from X-rate.com, I came up with 32.4xx to the Dollar for 2014.

USD BAHT 2014.JPG

I thought the Treasury Dept. was a little less than fair to come up with an official/approved FBAR exchange rate USD/THB of 32.92. But that's what it is and so be it.

Maybe they use forex rates or something like that.

A week ago, I just wired cash from the USA to Thailand and the final rate was 32.4 minus fees of 1034 THB for the transaction on the Thai bank side. The wire cost me 25 USD on the stateside end.

I'd love to get 32.9 but...

I recommend that in the future, you send money via SWIFT, from your US bank to account at Bangkok Bank. My cost, when I do such, is a mere $3.

Thanks but I think what you and I did were two very distinctly different transactions.

I'd like to see this thread focused on USA tax reporting for tax year 2014.

Edited March 1, 2015 by watcharacters

[watcharacters]

If anyone happens to have the same circumstances I do of using a Mac and importing 1099b from Charles Schwab please tell me the secret of doing it if you know. I signed up for the deluxe edition but find no way to import the reporting of gain/loss of equities.

Also does TurboTax® provide for long term carryover of stock losses? I don't find it.

TIA

[watcharacters]

Sometimes "chat" features offered may not be quite what some may anticipate.

how can I import 1099b tax information from Schwab using a Mac

I'm using turbotax deluxe 2014.

• 1099-b, deluxe, import, mac, turbotax
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edit: it was referred to as a live chat on a site I reached while researching Turbotax.

I think it's more accurately referred to as an archive. I though a representative from Turbotax would be on hand to possibly answer the question. Wrong again. Not seeking tax advice but a procedural question about the product I'm considering buying.

Edited March 9, 2015 by watcharacters

[55Jay]

As noted earlier, Turbo Tax kicked investment functions from Deluxe to Premier level in the 2014 software.

[skatewash]

I also became a refugee from TurboTax since they decided to make taxpayers with investment income upgrade this year. Filled in my forms using TurboTax as usual. Right before had to pay $40 to file electronically (discounted price through Vanguard), previewed my 1040 online (which I couldn't save or print for obvious reasons), wrote down the significant numbers, and abandoned TurboTax. Went over to TaxAct, filled in my forms, made sure I got the same results and using TaxAct filed electronically for free. Although I prefer TurboTax to TaxAct (due to familiarity and and overall belief that TT offers a better experience), if next year TurboTax costs money and TaxAct is free, I will repeat what I did this year.

I hope people who planned to come to Thailand from the US were able to establish residence in a state-income tax free state (and thereby avoid leaving the country from a state with income tax) before coming here. Saves the poor taxpayer from the continuing unwelcome attentions of their former states, some of which may suffer from chronic separation anxiety (e.g, Maryland, Virginia, California, etc.) and require taxpayers to pay or file income tax returns even though you no longer live there.

[skatewash]

What exchange rate do you use for Baht to Dollar for taxes? I've read it on TVF before, but can't remember if it's the rate on 31DEC, or if you use an IRS provided rate, such as this table http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates

IRS' 33.8 seems too high though. From what I can see on XE charts, the Baht hit 33.0x only briefly in December 2014. On 31DEC, it was 32.8.

Using 12 monthly averages from X-rate.com, I came up with 32.4xx to the Dollar for 2014.

USD BAHT 2014.JPG

Yeah, I doubt 33.8 THB/USD existed at any time during 2014, let alone as an average. The entry on the IRS website for Thailand is clearly wrong, probably a typo. However, I happily made use of it for my return as it reduced my Thai interest income and thereby saved me a few bucks in US tax.

The US government seems to get a lot of things wrong about Thailand. I can remember years ago getting a US government per diem rate for Bangkok that was wildly over-the-top. The amount provided would have been appropriate for maybe Paris or Tokyo, it was ridiculous for Bangkok. Since I got to keep the per diem regardless of actual expenses, I didn't complain.