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

[watcharacters]

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?

I've chosen to do as many do and compare TurboTax® and H & R Block® Everything seems pretty similar exempt for how they deal with Form 8398.

H & R Block came up with this:

"Did you have either of these in 2014?

Yes

No

Check any that apply.

Financial interest in or signature authority over a foreign financial account of any size LEARN MOREABOUT FOREIGN FINANCIAL ACCOUNT - OPENS A SIMULATED DIALOG

Financial interest in or signature authority over foreign financial accounts worth $10,000 or more LEARN MOREABOUT FOREIGN FINANCIAL ACCOUNT - OPENS A SIMULATED DIALOG

Received a distribution from, or was the grantor of, or transferor to, a foreign trust

Ownership or authority over foreign financial assets worth more than $50,000 on Dec. 31, 2014 or worth more than $75,000 at any time in 2014LEARN MOREABOUT FOREIGN FINANCIAL ASSETS - OPENS A SIMULATED DIALOG

Since you have foreign financial assets worth more than $50,000 on Dec. 31, 2014, or worth more than $75,000 at any time in 2014, you need Form 8938: Statement of Specified Assets. This program doesn’t include Form 8938. You can go to www.irs.gov-Opens a new window to get the form and fill it out. When you’re ready to file your federal return, we’ll help you print and mail it since you can’t e-file with Form 8938."

However TurboTAx said the opposite:

'

"About the Amount of Your Foreign Financial Assets

Was the total value of your specified foreign financial assets more than $200,000 on the last day of 2014 or more than $300,000 at any time during the year?

Yes

No

Based on what you told us, it turns out you don't need to report your foreign financial assets."

I don't to send any unnecessary forms as a result of reporting something which doesn't need reporting. The threshold shown by each of these programs is quite different.

So Block says I need to file 8938 while TurboTax says it's not required.

Anyone else notice this or am I just missing something? Which one is correct?

Edited March 15, 2015 by watcharacters

[watcharacters]

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.

Tell me it ain't so. Skatewash, are you saying after paying the full price for the Premier version of TurboTax® @ 54.99 USD you were then told you'd need to pay an additional $40 to file online? I hope I misunderstand your post because if that's so it's egregious.

[skatewash]

Tell me it ain't so. Skatewash, are you saying after paying the full price for the Premier version of TurboTax® @ 54.99 USD you were then told you'd need to pay an additional $40 to file online? I hope I misunderstand your post because if that's so it's egregious.

It ain't so. Sorry, I was less than clear. I paid nothing for TurboTax. I would have been entitled to purchase the Premier version of TurboTax for $39.00 if I were to go through the Vanguard site (which offered the discount) when purchasing the software, which would have included the ability to e-file online, but I decided not to avail myself of this opportunity.

Like many online tax software packages TurboTax and TaxAct let you input all your info into their online software without making you pay anything upfront. They might not let you import data (e.g., 1099-INT, 1099-DIV, 1099-B ) from your financial institutions (which may save you a great deal of time) without paying (although TurboTax does do this for free!), but they will let you enter the information in by hand for free. So you can use any of these online tax software packages to calculate your return at no cost whatsoever. However, to either print or e-file your return they make you purchase the software. That's fair, of course; it's how they are compensated for their effort in producing the software. But some tax software packages allow you to do everything for free (including e-file) if you meet certain financial criteria (basically, you don't earn over a certain amount of income). Since I'm retired and have no earned income I qualify to use TaxAct software package for free (including free e-file of the federal return).

Last year I used TurboTax, which I quite like, and I was able to file my federal tax return for free (including investment income, e.g., 1099-B ) because I met their financial requirements to do so. This year TurboTax (as is their right to do so) decided to make customers needing to account for investment income use the Premier version, which was not going to be free, but instead cost me $39.00. I declined to purchase TurboTax this year under those circumstances. But I like and trust TurboTax, so I imported last year's tax return (which I had done in TurboTax), and imported all my tax documents from my financial institutions, and calculated my tax due/refund due, recording by hand the significant figures (e.g., Adjusted Gross Income, Tax, Foreign Tax Credit, etc.). Then I abandoned TurboTax and began to use TaxAct, which I knew would be free for me to use (and e-file) this year.

So I calculated my taxes two times this year (once in TurboTax, and once in TaxAct) and verified that they both arrived at the same result. That boosted my confidence in TaxAct. Next year, I suspect I will use TaxAct instead of TurboTax unless TurboTax reverses course and allows me to fill in investment income related forms and e-file for free.

Basically, TurboTax lost a non-paying customer this year and TaxAct gained a non-paying customer. I'm not sure which company comes out ahead on that deal, but bottom-line I filed my US federal return for free again.

Edited March 15, 2015 by skatewash

[skatewash]

I don't to send any unnecessary forms as a result of reporting something which doesn't need reporting. The threshold shown by each of these programs is quite different.

So Block says I need to file 8938 while TurboTax says it's not required.

Anyone else notice this or am I just missing something? Which one is correct?

I believe TurboTax is correct, you don't need to file 8938. When a question like this arises when using a tax preparation software package it's best to go to the source:

http://www.irs.gov/pub/irs-pdf/i8938.pdf

See "Reporting Thresholds Applying to Specified Individuals" on the 2nd page of the above link. The reporting thresholds differ depending on where you live (in or out of the US) and the kind of return you file regarding your marital status. Given the text you quoted from TurboTax it would appear that you qualify for the $200,000/$300,000 threshold which would correspond to someone living outside the US and filing either a single return or married filing separately.

Hope this helps.

[watcharacters]

Tell me it ain't so. Skatewash, are you saying after paying the full price for the Premier version of TurboTax® @ 54.99 USD you were then told you'd need to pay an additional $40 to file online? I hope I misunderstand your post because if that's so it's egregious.

It ain't so. Sorry, I was less than clear. I paid nothing for TurboTax. I would have been entitled to purchase the Premier version of TurboTax for $39.00 if I were to go through the Vanguard site (which offered the discount) when purchasing the software, which would have included the ability to e-file online, but I decided not to avail myself of this opportunity.

Like many online tax software packages TurboTax and TaxAct let you input all your info into their online software without making you pay anything upfront. They might not let you import data (e.g., 1099-INT, 1099-DIV, 1099-B ) from your financial institutions (which may save you a great deal of time) without paying (although TurboTax does do this for free!), but they will let you enter the information in by hand for free. So you can use any of these online tax software packages to calculate your return at no cost whatsoever. However, to either print or e-file your return they make you purchase the software. That's fair, of course; it's how they are compensated for their effort in producing the software. But some tax software packages allow you to do everything for free (including e-file) if you meet certain financial criteria (basically, you don't earn over a certain amount of income). Since I'm retired and have no earned income I qualify to use TaxAct software package for free (including free e-file of the federal return).

Last year I used TurboTax, which I quite like, and I was able to file my federal tax return for free (including investment income, e.g., 1099-B ) because I met their financial requirements to do so. This year TurboTax (as is their right to do so) decided to make customers needing to account for investment income use the Premier version, which was not going to be free, but instead cost me $39.00. I declined to purchase TurboTax this year under those circumstances. But I like and trust TurboTax, so I imported last year's tax return (which I had done in TurboTax), and imported all my tax documents from my financial institutions, and calculated my tax due/refund due, recording by hand the significant figures (e.g., Adjusted Gross Income, Tax, Foreign Tax Credit, etc.). Then I abandoned TurboTax and began to use TaxAct, which I knew would be free for me to use (and e-file) this year.

So I calculated my taxes two times this year (once in TurboTax, and once in TaxAct) and verified that they both arrived at the same result. That boosted my confidence in TaxAct. Next year, I suspect I will use TaxAct instead of TurboTax unless TurboTax reverses course and allows me to fill in investment income related forms and e-file for free.

Basically, TurboTax lost a non-paying customer this year and TaxAct gained a non-paying customer. I'm not sure which company comes out ahead on that deal, but bottom-line I filed my US federal return for free again.

I wasn't criticizing in the least about the clarity of your post to which I replied, but, regardless, you posted an outstanding reply.

Thank you very much for adding all the details you've added.

I'm happy to know TurboTAx isn't hiding additional charges since that would just serve to rile me. I definitely like to know the final charge upfront before I commit to buying any product.

As I've said elsewhere, I think, overall we come out ahead with the taxes we pay in the US and what we get in return. I hate the paperwork process but know in the back of my mind, I haven't seen or heard of any country have a tax system which I'd rather have. I know we also have among the lowest tax rates period for an industrialized country.

But I don't like the process and may end up looking for a CPA again after this year.

Kudos to you Skate for "beating" the system with managing to employ available software at zero cost to you. I like that.

This is a pure classic for me:

"Basically, TurboTax lost a non-paying customer this year and TaxAct gained a non-paying customer. I'm not sure which company comes out ahead on that deal, but bottom-line I filed my US federal return for free again.

Damn, I'm also not sure which company made out...

Congrats!

[TerryLH]

"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."

You are required to file state tax forms in the state you live in. If you live full time in Thailand, you don't live in any state, so are not required to file a state form anywhere.

[skatewash]

You are required to file state tax forms in the state you live in. If you live full time in Thailand, you don't live in any state, so are not required to file a state form anywhere.

Terry, that makes so much common sense that I almost hate to point out to you that some US states don't see it that way.

For example, the State of Virginia does not take the eminently sensible position you outline (from http://www.tax.virginia.gov/content/residency-status):

Individuals Living Abroad

Virginia residents who travel outside the country, or take up temporary or permanent residence abroad, should be aware of the filing provisions discussed below.

Overseas Rule

If you are residing or traveling outside the United States or Puerto Rico (including persons serving in the military or naval service) on May 1, you are not required to file your return until July 1 of the filing year. You must attach a statement to your return certifying that you were outside the United States or Puerto Rico on the date the return was due.

Residency Issues for Persons Living Abroad

If you are a Virginia resident who accepts employment in another country or moves outside the United States for other reasons (including military orders), the fact that you are living abroad does not mean that you are no longer considered a Virginia resident for tax purposes. Unless you have established residency in another state, you will still be considered a domiciliary resident of Virginia, and will be required to file Virginia income tax returns.

A domiciliary resident of Virginia is one whose legal domicile in the technical sense is in Virginia. Unless an individual acquires a legal domicile in another state, he or she is still a Virginia resident. This applies even if the person is residing in another jurisdiction and may have been residing there for a number of years. The fact that a person has been absent from Virginia, whether in the foreign service of the United States or in the exercise of private enterprise, does not in any way cancel out their Virginia citizenship or legal domicile. As a matter of law, he or she is as much liable to income taxation in Virginia as residents who are physically present in Virginia throughout the year.

Every resident of Virginia, including domiciliary residents, is liable to State income taxation as a resident. This means that they are subject to Virginia income tax on their entire income, whether it came from sources in or outside of Virginia. Those persons qualifying to exclude certain foreign income from their federal returns in accordance with Section 911 of the Internal Revenue Code will receive the same exclusion on their Virginia returns.

So basically, once a Virginia taxpayer (domiciliary resident) you don't lose that honor, unless and until you establish your legal domicile in another US state. If you leave the country as a Virginia domiciliary resident you have to continue paying state income tax forever. Living full time in Thailand does not in any way "cancel out [your] Virginia citizenship or legal domicile. As a mater of law, [you] are as much liable to income taxation in Virginia as residents who are physically present in Virginia throughout the year."

For example, Maryland Subject: Domicile and Residency C: (from http://taxes.marylandtaxes.com/Resource_Library/Tax_Publications/Administrative_Releases/Income_and_Estate_Tax_Releases/ar_it37.pdf):

Domicile and Residency: C. Legal Restrictions

A person may be legally prohibited from

establishing a domicile in a foreign jurisdiction

because of immigration or visa restrictions. For

example, an individual who is sent to a foreign

country to perform the duties of the individual’s job

may not be allowed to remain in that country for an

indefinite period of time. The individual’s

presence in that country may be conditioned on

continuing employment or on good relations with

that country. An individual who is required to

leave a foreign country after a certain period of

time, or upon the happening of a certain event,

cannot establish a domicile in that country and,

therefore, cannot effectuate a change of domicile,

regardless of their intent.

Certain factors to consider include:

1. Is the taxpayer employed by the U.S.

Government, including the military

2. Is the taxpayer in the foreign country under

a work visa or other restrictive visa

3. Is the taxpayer in the foreign country on a

temporary assignment

D. Presence in New Domicile

A taxpayer not only has to abandon the

taxpayer’s old domicile, but the person must

establish a new domicile. In order to establish a

new superseding domicile, the taxpayer must be

physically present in the state or foreign country

that the individual intends to be the new domicile.

For example, a taxpayer cannot leave Maryland for

an assignment in Spain, but claim Florida as their

new domicile without being physically present in

Florida and without taking steps to establish the

new Florida domicile.

Since you cannot, under these rules, establish a superseding domicile in Thailand (short of becoming a Permanent Resident or Citizen), you cannot escape your continuing obligation to pay Maryland State income taxes.

So when I knew I was going to move to Thailand, I moved out of my home state of Maryland, severed all ties to that state, and established those ties in Florida (including filing a declaration of domicile at the county courthouse). In other words, I left Maryland to move to another state, Florida, so Florida became my superseding domicile. Had I not done so Maryland would have remained my tax domicile and I have no doubt they would have tracked me down to the ends of the earth, when I neglected to pay Maryland State income tax in the years for which I was no longer a physical resident for any part of the year. If you think I'm paranoid I suspect you never had the pleasure of living in Maryland and dealing with the state government.

Oh, by the way, Florida doesn't happen to have a state income tax, so when you move out of that state to move to a foreign country they just let you go. Imagine that!

[55Jay]

Oh yeah. California came knocking on my door after 9 years. Tax lawyer clued me up and helped me craft response. Worked, never heard from them again.

[JimGant]

Unless an individual acquires a legal domicile in another state, he or she is still a Virginia resident.

Virginia's Department of Taxation has published this scare tactic for several years, but Virginia tax rulings by the Tax Commissioner (http://www.tax.virginia.gov/laws-rules-decisions/search?search_api_views_fulltext=domiciliary%20resident ) have trumped this proclamation. The most fitting ruling I found is this one:

http://www.tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/12-26

The Taxpayers were Virginia residents who owned a home in Virginia and worked in Virginia in 2009. The wife, who was born in the ***** (Country A), is a dual citizen of the United States and Country A. The wife retired from employment in Virginia, moved to Country A in August 2009, and rented a home. The husband retired and moved to Country A in April 2010 to live with his spouse. They retained their Virginia driver's licenses after moving to Country A and maintained automobiles registered in Virginia. The Taxpayers also owned a home in Virginia until April 2010.

The Taxpayers contacted the Department to determine how they should file their Virginia income tax returns. The Department advised the Taxpayers that, as citizens of the United States, they remained domiciliary residents of Virginia and must continue to file as residents. The Taxpayers filed individual income tax returns as residents for the 2009 and 2010 taxable years. They now request a ruling concerning their status as residents of Country A.

So, the Dept of Taxation actually used this "you have to move to another state, not a foreign country" gobbledygook, but the Tax Commissioner ruled otherwise, actually citing a ruling by the Dept of Taxation 11 years prior:

The Department has also previously ruled that an individual can abandon a Virginia domicile and establish domicile in a foreign country and continue to be a United State, citizen. See P.D. 00-6 (2/28/2000).

So, the finding was:

"After reviewing the information at hand, I find that the wife changed her domicile to Country A when she moved there in August 2009. The husband changed his domicile to Country A in May 2010, when he sold the Taxpayers' home and property in Virginia and moved to Country A."

Looking at several of the other rulings, the Commissioner is pretty lenient in finding for the previously domiciliary residents, with no differentiating between moving to a foreign country or to another state (or for that matter, Guam or Puerto Rico). But you do have to unload most of your attachments to Virginia, like a home, bank accounts, automobile registration, etc. (although there are some exceptions in some of the rulings) And, if you have a Virginia driver's license, this won't count against you, at least in solo. But you do have to let it expire, i.e., don't renew it.

"The Department has found that an individual may successfully establish a domicile outside Virginia even if he retains a Virginia driver's license. See P.D. 00-151 (8/18/2000). However, obtaining or renewing a Virginia driver's license is considered to be a strong indicator of intent to retain domiciliary residency in Virginia. See P.D. 02-149 (12/9/2002)."

Also, when you finally abandon Virginia for Thailand, you have to file a part year tax return. Best not tempt the Dept of Taxation by using your new Thai address on that part year tax return. Get a mail forwarding address in Texas, Florida, or any of the other 7 states that don't have income tax. And get Virginia off any and all 1099's that you may get in the future. I just noticed that a sale of some Fidelity IRA holdings asked me if I wanted any tax withholdings from my registered state of Virginia. I said no, which I was allowed to do, as I have a US address. But I noted they would be required to withhold if I had a foreign address. Thus, one more reason for a mail forwarding address in Texas.

[DogNo1]

TV somehow lost my lengthy post so I will just say that I have been using TaxAct for 10 years. It does capital loss carryovers and lets you make up your own K-1 reports then calculates them in. Good software. Incidentally, both Turbotax and TaxAct have versions for professionals who do tax returns for clients.

[watcharacters]

Oh yeah. California came knocking on my door after 9 years. Tax lawyer clued me up and helped me craft response. Worked, never heard from them again.

Thanks for that one 55Jay. It's pretty incredible but I understand the goal of the states. If a state can legally obligate a resident or former resident to pay taxes forever, that's a great way to fatten the tax coffers and waste spend more money

I'm aware of the three year audit time frame and 7 years in case of suspected fraud but your 9 year post takes the cake. DAMN!

[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

Just a couple of things.

I learned from Schwab tech support that inputing "import now" in the TurboTax search box gets everything rolling for the tax information. I mentioned to the lady helping me I was perplexed there was no hint about this on the site. Forrest Gump, shit happens

I did find a query about stock loses and backed off from it. My loss was short, not long, term in 2007 for the 2008 tax reporting year. In a month I had a haircut that was so short i had to get skin grafting as did so many others. I let it all go on TurboTAx as I realize the reporting I'd do would likely have errors and I'll wait until I use a preparer (CPA/EA) again. I've little faith in my preparation skills. I'll be long dead before the "running out" condition applies to my loss.

JimGant, on this thread, wrote about the matter of addresses. That's a good topic.

I left a state in the USA and moved to Thailand. I feel part of my proving my resistance to paying state taxes is my address here in Thailand. I entered my Thailand address on the TurboTAx site but I'd rather correspond with any US government agency with my mailing service in the US. I don't find the option of having an alternative correspondence address. I've gone to the last page where I can submit but hesitate to do so because of not knowing where I'd get any mail sent.

I should add, I don't care about withholdings in that I can wait for a refund when applicable. It's be great if i were a more astute person with my money so leaving excess refunds with the government would matter to me, but I'm not that astute.

My issue is the reliability of the Thailand postal system. While I'm not critiquing it, I don't think I can rely on it. I don't want to find out the IRS or any other government agency says I've been sent a notice only to find out it never got here.

I did pose the question on the TurboTax forum but have not gotten a reply. If no one has a suggestion I know I'll have to go through the phone support system offered by TurboTax and probably spend a few hours of my life waiting for a "live" person to answer.

Thoughts??

Oh yes and in regards to the post of 55Jay, the biggest issue I see is the government from a city level to a federal one has unlimited funds to battle any individual. I'd hate to be paying the salary of a lawyer who is trying to take away money I feel is not fair for the government to have. I'm cool about paying my fair/correct share, no problem. Again, I think overall it's a pretty decent system but as with so much in life, it ain't perfect.

TIA

[connda]

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.

Tell me it ain't so. Skatewash, are you saying after paying the full price for the Premier version of TurboTax® @ 54.99 USD you were then told you'd need to pay an additional $40 to file online? I hope I misunderstand your post because if that's so it's egregious.

We can file this under "...And All The Other Fun", Lol!

I recommend to purchase Turbo Tax from Amazon. I bought the TurboTax Deluxe 2014 Fed + Fed Efile Tax Software for 29.99 at Amazon.com. That included a software upgrade to Premier for free if the Deluxe forces you to upgrade. I don't have to file state taxes so I get off a bit cheaper. There are some blistering comments in the Amazon comment section that are being address by one of the upper-level execs at Intuit (Turbo Tax). I'm getting the feeling they understand the sh*t-storm they created with the 'new and improved' marketing model. Anyway, check out Amazon because they are offering free upgrades and refunds, and the comment section is worth reading to get Intuit's view on the controversy and how they are trying to mitigate the customer uproar.

FYI, I just keep it all in perspective. My CPA in the US was charging me $115, and when I started working in Thailand a few years back when I first got here, I needed to report that Foreign Earned Income Exclusion. My CPA didn't file my taxes until Oct of that year. She had been my CPA for 15 years, but I dumped her and hired another CPA. Mistake! The new CPA charged me per hour while she was learning how to report the Foreign Earned Income Exclusion and the foreign unearned income for interest on my bank account I use to cover my Non-O Marriage extension. Criky, she nailed me for about $250 and couldn't even E-file my return, money-grubbing b.......nevermind. So when I received the return, I went to Amazon, bought Turbo Tax, punched all the number in from the CPAs 1040, checked the accuracy, and E-filed! It probably took me less than an hour. I fired her buns too and have been using Turbo Tax ever since. So, even if Turbo Tax forces me to upgrade to Premium, it's still well under the $115 that my first CPA was charging me. I have no plans to switch to another product.

[55Jay]

Oh yeah. California came knocking on my door after 9 years. Tax lawyer clued me up and helped me craft response. Worked, never heard from them again.

Thanks for that one 55Jay. It's pretty incredible but I understand the goal of the states. If a state can legally obligate a resident or former resident to pay taxes forever, that's a great way to fatten the tax coffers and waste spend more money

I'm aware of the three year audit time frame and 7 years in case of suspected fraud but your 9 year post takes the cake. DAMN!

I was still pretty young when I left, didn't really understand all this, no idea how my life was going to end up. Turns out I never went back but years later, I had to use my Mom's CA address to get hired for a company, and that brought me back up on the California tax radar. Hence the letter I mentioned. Luckily my company's HQ base was in Florida but it still took me 2 months of beating my head against the HR wall, to get them to change my tax withholding to FL000. That, and a couple hundred bucks in good advice, got the California monster off my back.

Edited March 27, 2015 by 55Jay

[connda]

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.

Tell me it ain't so. Skatewash, are you saying after paying the full price for the Premier version of TurboTax® @ 54.99 USD you were then told you'd need to pay an additional $40 to file online? I hope I misunderstand your post because if that's so it's egregious.

We can file this under "...And All The Other Fun", Lol!

I recommend to purchase Turbo Tax from Amazon. I bought the TurboTax Deluxe 2014 Fed + Fed Efile Tax Software for 29.99 at Amazon.com. That included a software upgrade to Premier for free if the Deluxe forces you to upgrade. I don't have to file state taxes so I get off a bit cheaper. There are some blistering comments in the Amazon comment section that are being address by one of the upper-level execs at Intuit (Turbo Tax). I'm getting the feeling they understand the sh*t-storm they created with the 'new and improved' marketing model. Anyway, check out Amazon because they are offering free upgrades and refunds, and the comment section is worth reading to get Intuit's view on the controversy and how they are trying to mitigate the customer uproar.

FYI, I just keep it all in perspective. My CPA in the US was charging me $115, and when I started working in Thailand a few years back when I first got here, I needed to report that Foreign Earned Income Exclusion. My CPA didn't file my taxes until Oct of that year. She had been my CPA for 15 years, but I dumped her and hired another CPA. Mistake! The new CPA charged me per hour while she was learning how to report the Foreign Earned Income Exclusion and the foreign unearned income for interest on my bank account I use to cover my Non-O Marriage extension. Criky, she nailed me for about $250 and couldn't even E-file my return, money-grubbing b.......nevermind. So when I received the return, I went to Amazon, bought Turbo Tax, punched all the number in from the CPAs 1040, checked the accuracy, and E-filed! It probably took me less than an hour. I fired her buns too and have been using Turbo Tax ever since. So, even if Turbo Tax forces me to upgrade to Premium, it's still well under the $115 that my first CPA was charging me. I have no plans to switch to another product.

I'm working on my taxes this evening TurboTax Deluxe 2014 Fed + Fed Efile Tax Software, annnnnd I had to upgrade to Premier. But, no problem at all. It's free, at least with this version that I bought from Amazon. I got to a place in the tax questionnaire where it popped up the screen saying I had to upgrade, it explained it was free - just put the button. So I pushed the upgrade button, saved my return, and the system queried the Internet and returned a receipt and confirmation number. Clicked 'Continue' and I'm now working with the Premier versions. Easy breezy!

[55Jay]

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.

Tell me it ain't so. Skatewash, are you saying after paying the full price for the Premier version of TurboTax® @ 54.99 USD you were then told you'd need to pay an additional $40 to file online? I hope I misunderstand your post because if that's so it's egregious.

We can file this under "...And All The Other Fun", Lol!

I recommend to purchase Turbo Tax from Amazon. I bought the TurboTax Deluxe 2014 Fed + Fed Efile Tax Software for 29.99 at Amazon.com. That included a software upgrade to Premier for free if the Deluxe forces you to upgrade. I don't have to file state taxes so I get off a bit cheaper. There are some blistering comments in the Amazon comment section that are being address by one of the upper-level execs at Intuit (Turbo Tax). I'm getting the feeling they understand the sh*t-storm they created with the 'new and improved' marketing model. Anyway, check out Amazon because they are offering free upgrades and refunds, and the comment section is worth reading to get Intuit's view on the controversy and how they are trying to mitigate the customer uproar.

FYI, I just keep it all in perspective. My CPA in the US was charging me $115, and when I started working in Thailand a few years back when I first got here, I needed to report that Foreign Earned Income Exclusion. My CPA didn't file my taxes until Oct of that year. She had been my CPA for 15 years, but I dumped her and hired another CPA. Mistake! The new CPA charged me per hour while she was learning how to report the Foreign Earned Income Exclusion and the foreign unearned income for interest on my bank account I use to cover my Non-O Marriage extension. Criky, she nailed me for about $250 and couldn't even E-file my return, money-grubbing b.......nevermind. So when I received the return, I went to Amazon, bought Turbo Tax, punched all the number in from the CPAs 1040, checked the accuracy, and E-filed! It probably took me less than an hour. I fired her buns too and have been using Turbo Tax ever since. So, even if Turbo Tax forces me to upgrade to Premium, it's still well under the $115 that my first CPA was charging me. I have no plans to switch to another product.

I'm working on my taxes this evening TurboTax Deluxe 2014 Fed + Fed Efile Tax Software, annnnnd I had to upgrade to Premier. But, no problem at all. It's free, at least with this version that I bought from Amazon. I got to a place in the tax questionnaire where it popped up the screen saying I had to upgrade, it explained it was free - just put the button. So I pushed the upgrade button, saved my return, and the system queried the Internet and returned a receipt and confirmation number. Clicked 'Continue' and I'm now working with the Premier versions. Easy breezy!

Turbo Tax lost the plot and it blew up in their face this year. I went over to TaxAct, $12.99 for the full, Deluxe version. Good to go.

[gk10002000]

Might want to add some words on Obamacare or the ACA. If people are living overseas for the proper amounts of time the can in general supposedly be exempt from Obamacare. Has anybody claimed that exemption and gotten confirmation on how the IRS accepted or handled that?

[skatewash]

Might want to add some words on Obamacare or the ACA. If people are living overseas for the proper amounts of time the can in general supposedly be exempt from Obamacare. Has anybody claimed that exemption and gotten confirmation on how the IRS accepted or handled that?

This year I claimed exemption type code C: "A U.S. citizen or resident who spent at least 330 full days outside of the U.S. during a 12-month period" on my IRS Form 8965 (Health Care Exemptions).

This year I used my US mailing address on my Form 1040, rather than my actual Thai home address. I have just moved into a newly constructed condo and I don't have an official address yet, and therefore don't get mail delivery at my new place. I hope using my US mailing address on the Form 1040 will not cause any problem with using that Health Care Exemption code. I have not heard anything back from the IRS. Fingers crossed.

I prefer to use my US mailing address in the case I do get any mail from the IRS as I will find out about it as soon as it is delivered to my US mail service, which scans the contents of any letter I receive and I can access the scans online from Thailand. So I find out about the mail quicker and more reliably than receiving it in Thailand (or not receiving it, as the case might be). However, if this is going to cause problems with using my Health Care Exemption I will use my Thai home address next year, as I expect to have an official Thai address and mail delivery by then.

Here's a quick Health Care Exemption Checker provided free by TurboTax: https://turbotax.intuit.com/health-care/exemptions/#!/interview

Here's some IRS information on getting the Health Care Exemption: http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Exemptions

Good luck to everyone claiming the exemption!

Edited March 28, 2015 by skatewash

[gk10002000]

thank you skatewash. Great post. I too would want to keep a US mailing address when I move overseas. The whole ACA thing is dicey at the moment because of the number of federal agencies involved and how they share data, and personal information and addresses.

[connda]

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

TT COMP.JPG

At least year, if you buy Deluxe and it forces you to Premier, the upgrade is free. Well, at least if you bought if from Amazon. I can't speak for downloads from other locations.

[connda]

I've got FBAR issues. Attempting to download the NFFBAR.pdf file. To do this you go to http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html and click on Prepare FBAR. I get an Untrusted Connection Error in Firefox and Chrome. Although I can download it in IE, I don't get a SSL Lock symbol in the address bar even though the download web site is HTTPS. Here's a screen shot. Anyone else having the same issue?

[connda]

Might want to add some words on Obamacare or the ACA. If people are living overseas for the proper amounts of time the can in general supposedly be exempt from Obamacare. Has anybody claimed that exemption and gotten confirmation on how the IRS accepted or handled that?

On the IRS form 8965 in section 3 you fill out your name and SSN and put a 'C' in the exemption field, and Bob's your uncle! That easy.

[skatewash]

I've got FBAR issues. Attempting to download the NFFBAR.pdf file. To do this you go to http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html and click on Prepare FBAR. I get an Untrusted Connection Error in Firefox and Chrome. Although I can download it in IE, I don't get a SSL Lock symbol in the address bar even though the download web site is HTTPS. Here's a screen shot. Anyone else having the same issue?

Firefox.jpg

Chrome.jpg

connda,

I just tried it and didn't experience the same problem. I'm using Google Chrome Version 41.0.2272.101 m. Not sure what the problem could be. Maybe try it again now and see if the same thing happens? If it still fails, I guess I would go ahead and use IE. You're downloading a blank PDF file so it wouldn't cause me a great deal of concern. Good luck!

Edit:

Don't see why this would help, but maybe update to the latest version of Google Chrome.

Edited March 31, 2015 by skatewash

[connda]

I've got FBAR issues. Attempting to download the NFFBAR.pdf file. To do this you go to http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html and click on Prepare FBAR. I get an Untrusted Connection Error in Firefox and Chrome. Although I can download it in IE, I don't get a SSL Lock symbol in the address bar even though the download web site is HTTPS. Here's a screen shot. Anyone else having the same issue?

Firefox.jpg

Chrome.jpg

connda,

I just tried it and didn't experience the same problem. I'm using Google Chrome Version 41.0.2272.101 m. Not sure what the problem could be. Maybe try it again now and see if the same thing happens? If it still fails, I guess I would go ahead and use IE. You're downloading a blank PDF file so it wouldn't cause me a great deal of concern. Good luck!

Edit:

Don't see why this would help, but maybe update to the latest version of Google Chrome.

Thanks for checking. I'm on the same version of Chrome. Just odd. I wrote to Fincen to get their take on it. I'll see if I can replicate the warning on a different computer back in Chiang Mai.

[maphraw]

Turbo Tax will not let you download Form 8621. This, apparently, is the form one needs to fill out and include if one has a mutual fund from a foreign country. I have a Thai mutual fund a that has paid dividends and I have been told that it should be included on Form 8621. Turbo tax informed me that if I want to include that form I have to download it myself from the IRS and fill it out myself. I would then have to print my Turbo Tax return and mail it along with Form 8621.

But I am paying Turbo Tax to do my taxes so I was surprised they couldn't get their act together to do my entire return. They also would not accept my American Visa debit card because it has a foreign address. I then contacted my American bank and they said they could not change my Thai address to my American address because I am living in Thailand. Last year T. Rowe Price sent me an urgent letter informing me that I had to change my Thai address to an American address or else they would liquidate all of my accounts and transfer them to my American bank. Turbo Tax also informed me that since I am filing a joint account and my foreign assets are less than something like $250,000 I don't really have to claim anything. It seems like a bit of a contradiction. My accountant included my Thai mutual fund on a form 8621 last year. Is any one using this form I wonder. I like using Turbo Tax because they import my tax data from the American mutual fund companies I have investments in. Any comments?

[skatewash]

Turbo Tax will not let you download Form 8621. This, apparently, is the form one needs to fill out and include if one has a mutual fund from a foreign country. I have a Thai mutual fund a that has paid dividends and I have been told that it should be included on Form 8621. Turbo tax informed me that if I want to include that form I have to download it myself from the IRS and fill it out myself. I would then have to print my Turbo Tax return and mail it along with Form 8621.

But I am paying Turbo Tax to do my taxes so I was surprised they couldn't get their act together to do my entire return. They also would not accept my American Visa debit card because it has a foreign address. I then contacted my American bank and they said they could not change my Thai address to my American address because I am living in Thailand. Last year T. Rowe Price sent me an urgent letter informing me that I had to change my Thai address to an American address or else they would liquidate all of my accounts and transfer them to my American bank. Turbo Tax also informed me that since I am filing a joint account and my foreign assets are less than something like $250,000 I don't really have to claim anything. It seems like a bit of a contradiction. My accountant included my Thai mutual fund on a form 8621 last year. Is any one using this form I wonder. I like using Turbo Tax because they import my tax data from the American mutual fund companies I have investments in. Any comments?

Form 8621 (Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) is included in TaxAct, which you can get for free as shown here: http://www.taxact.com/products/all_forms.asp?s=STD

In fact, TaxAct claims that it can provide all e-fileable IRS for free. It list the ones provided at the link above.

However, this may be a deal breaker for you: TaxAct does not provide automatic import of tax data from mutual fund companies like TurboTax does.

Presumably, using TaxAct you would be able to e-file your return and it would include Form 8621.

Regarding having a US address:

Yes, having a US address is critical to maintaining a US expats relationships with financial institutions in the US. You can thank the US federal government and its policies for that. It makes it very difficult for a US financial institution to do any business with a US citizen who does not have a US address. You can use a US-based friend or relative's address or a US-based mail service as your US address. I would recommend travelingmailbox.com, as an example of such a mail service. My recommendation is that you only use your US mailing address in any dealings with US financial institutions, for some of the very reasons you cite.

Good luck. Hope this helps.

[55Jay]

Not that it helps the current question but to clarify, Tax Act does have import:

Stock Import

Import stock transactions directly from GainsKeeper^®, TD Ameritrade™, ShareBuilder^®, Form8949.com, Raymond James®, Betterment, or a Comma Separated Values (CSV) file provided by your brokerage or TradeLog^®.

[skatewash]

Turbo Tax will not let you download Form 8621. This, apparently, is the form one needs to fill out and include if one has a mutual fund from a foreign country. I have a Thai mutual fund a that has paid dividends and I have been told that it should be included on Form 8621. Turbo tax informed me that if I want to include that form I have to download it myself from the IRS and fill it out myself. I would then have to print my Turbo Tax return and mail it along with Form 8621.

But I am paying Turbo Tax to do my taxes so I was surprised they couldn't get their act together to do my entire return. They also would not accept my American Visa debit card because it has a foreign address. I then contacted my American bank and they said they could not change my Thai address to my American address because I am living in Thailand. Last year T. Rowe Price sent me an urgent letter informing me that I had to change my Thai address to an American address or else they would liquidate all of my accounts and transfer them to my American bank. Turbo Tax also informed me that since I am filing a joint account and my foreign assets are less than something like $250,000 I don't really have to claim anything. It seems like a bit of a contradiction. My accountant included my Thai mutual fund on a form 8621 last year. Is any one using this form I wonder. I like using Turbo Tax because they import my tax data from the American mutual fund companies I have investments in. Any comments?

Form 8621 (Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) is included in TaxAct, which you can get for free as shown here: http://www.taxact.com/products/all_forms.asp?s=STD

In fact, TaxAct claims that it can provide all e-fileable IRS for free. It list the ones provided at the link above.

However, this may be a deal breaker for you: TaxAct does not provide automatic import of tax data from mutual fund companies like TurboTax does.

There may be a way around that for you this year, because apparently TaxAct does allow you to import tax from PDF files prepared by TurboTax:

** TaxACT can import tax data from PDF files prepared by the following software solutions: TurboTax®, H&R Block At Home®.

So, you may be able to start TaxAct and import your 2014 tax data from TurboTax (as a PDF file) into TaxAct. Go through TaxAct without having to enter much if any new information, and then use TaxAct to e-file your tax return.

[NancyL]

I've got FBAR issues. Attempting to download the NFFBAR.pdf file. To do this you go to http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html and click on Prepare FBAR. I get an Untrusted Connection Error in Firefox and Chrome. Although I can download it in IE, I don't get a SSL Lock symbol in the address bar even though the download web site is HTTPS. Here's a screen shot. Anyone else having the same issue?

Firefox.jpg

Chrome.jpg

I had issues, too, downloading NFFBAR from the BSA FBAR website and I wasn't in a very good mood, because I'd already used TaxActOnline to do what I thought was FinCEN reporting. Nope, TaxAct can't actually file the blasted reports, although it does a nice job of checking for boo-boos. I couldn't get NFFBAR to open on a couple of our computers. Something about not having the latest version of Adobe, when actually the most recent version WAS downloaded. Finally got it to work on Mozilla Firefox, but not Explorer or Chrome.

Just reviewed this thread and had a moment of panic about whether I should have filed Form 8938. In a moment of dumbness, I let my combined bank account balances go above $75,000 briefly here in Thailand last year. I heaved a sigh of relief in reading the actual instructions to the form and realizing I was OK because I'd been overseas more than 330 days last year.

Same with the Obama care exemption. Actually that was a little tricky to handle with TaxAct, but I figured it out.

We're actually due a refund, but I never could figure out how to finagle TaxAct to apply it to 2015 taxes. Looks like a refund or buying U.S. gov't bonds or some other stupid refund option is the only option. I know the Feds will direct deposit it OK, but I'd just as soon leave it with the IRS, rather than having to set up quarterly payments again.

[Pib]

I wouldn't waste my time filling in the FinCen114 data using whatever tax software you use. I use TaxAct software. Now I still click a few blocks in my tax software saying yea I know I need to submit a FinCen114 and will fill it out separately versus typing all the info into my tax software.

The reason I say don't waste your time is because you'll just need to "retype the info into the FinCen114 PDF form" which is uploaded/transmitted....I expect the U.S. Treasury computers are setup to automatically extract the data from "their" PDF form and not any other form made by a third party like TaxAct, TurboTax, etc. I figured I would just fill out the data once by only filling out the FinCen114 PDF form.

Also, last year's and this year's FinCen114 form was the same version (Ver 1.0)...if it's the same version next year just update your FinCen114 from this year and resubmit for next year. Unless a person is opening and closing bank accounts throughout the year like maybe some short term fixed accounts, about the only data you need to update is the amounts versus entering all your personal info and bank(s) addresses, etc.

I stopped completing the FBAR form in my tax software once you could no longer mail in the form and needed to use the FinCen114 form instead along with online submission only, which started last year.