Living in Ireland and filing US income tax

lookyhere

I lived in the US for a number of years and I'm a dual citizen (Ireland/US). I moved back to Ireland in 2014 to take care of my elderly mother.

I've been filing US taxes using my old NY address since I came back. It just seemed simpler. I used Turbotax to file electronically. I had no ordinary income (wages) in the US or Ireland in those years. I do have an investment acct and an IRA in the US, so have to include those on my return.

Is it straighforward enough to file using an Irish address. Is it just a matter of using a non-US address on the return or are there any complications - e.g., showing when I moved?

I'd also been filing NY State Tax returns as I lived in NY state. If I file as a non-resident, will I have to continue to file state returns?

Can I just use Turbotax as before? but with an Irish address?

lookyhere

Bumping this. Maybe it would be better in the Tax forum?

dennyk

Yes, you can just enter your Irish address on your next tax return when you file. No need to do so beforehand unless you have concerns about mail from the IRS reaching you before then, but if you really want to do it immediately, you can submit Form 8822 to the IRS at any time. No need to worry about establishing exactly when you moved, as you aren't claiming the Foreign Earned Income Exclusion anyway since you have no earned income. (If you do avail of it in the future, you don't have to do anything to "prove" how long you've been living outside the US unless you happen to be audited; the IRS will just take your word for it otherwise. As long as you hang onto some documentation somewhere showing you've been ordinarily resident in Ireland during the whole tax year in question just in case you are ever audited, you'll be good.)

You should be fine to use TurboTax; most tax prep services handle basic filing for overseas taxpayers well enough (though if you make the mistake of buying into foreign mutual funds or something and thereby trigger more onerous reporting requirements, they won't be of much help...). I can't personally speak to TurboTax, but I've used similar services to file my own taxes without issue in the few years I've been living here.

You should not need to file a tax return in New York State at all if you are no longer domiciled there, but NY is one of those states that really doesn't like losing taxpayers, so they don't make it easy to "leave". If you still own (or lease) the property at that old NY address and you've been actively using that address, NY will likely still consider you a statutory resident and will expect you to continue to file and pay income taxes. If you don't plan to return, it might be advisable to sever all of your ties to NY if possible (terminate any leases, sell any real estate, remove all personal property from there and bring it here or otherwise dispose of it, do not renew your driver's license or other state ID, do not cast any votes in local or state elections, etc.). If your situation is complex, you should discuss things with a tax attorney who is familiar with NY State tax laws to figure out the best course of action.

Also, don't forget about your FBAR (FinCEN Form 114) to report all of your Irish (or other foreign) bank account balances, if they total over $10k in aggregate. It is not filed with the IRS and so is not included in your normal tax filings; you must manually file using the BSA E-Filing System. You can find the form instructions in this PDF, and more information can be found on the IRS website. Failing to file if you do have qualifying foreign accounts could lead to very high penalties (up to the greater of ~$125k or half the total balance of each foreign account for willful violations).

lookyhere

dennyk wrote: »

Yes, you can just enter your Irish address on your next tax return when you file. No need to do so beforehand unless you have concerns about mail from the IRS reaching you before then...

OK, I'm not concerned about the IRS contacting me. I presume if I file online, then they can use email to contact me.

dennyk wrote: »

You should be fine to use TurboTax; most tax prep services handle basic filing for overseas taxpayers well enough (though if you make the mistake of buying into foreign mutual funds or something and thereby trigger more onerous reporting requirements, they won't be of much help...). I can't personally speak to TurboTax, but I've used similar services to file my own taxes without issue in the few years I've been living here.

I need to file Schedule D (as I sold some stock so have Capital Gains) so can't use the free return through TurboTax. I should have looked for a cheap copy of TurboTax earlier, they usually have deals but not now so close to filing deadline.

dennyk wrote: »

You should not need to file a tax return in New York State at all if you are no longer domiciled there, but NY is one of those states that really doesn't like losing taxpayers, so they don't make it easy to "leave"...it might be advisable to sever all of your ties to NY if possible (terminate any leases, sell any real estate, remove all personal property from there and bring it here or otherwise dispose of it, do not renew your driver's license or other state ID, do not cast any votes in local or state elections, etc.).

I don't own or lease any property there and haven't voted since I left in 2014. I would hate to lose my NY driver's license but it has a number of years on it before it needs to be renewed.

dennyk wrote: »

Also, don't forget about your FBAR (FinCEN Form 114) to report all of your Irish (or other foreign) bank account balances, if they total over $10k in aggregate. It is not filed with the IRS and so is not included in your normal tax filings; you must manually file using the . You can find the form instructions , and more information can be found . Failing to file if you do have qualifying foreign accounts could lead to very high penalties (up to the greater of ~$125k or half the total balance of each foreign account for willful violations).

I didn't know about this. Are you supposed to file within a certain period after moving? Are you then required to file annually?

dennyk

lookyhere wrote: »

I didn't know about this. Are you supposed to file within a certain period after moving? Are you then required to file annually?

You need to file an FBAR for every tax year during which you hold one or more non-US financial assets (including ordinary bank accounts, pensions, investment accounts, etc.) whose total aggregate value in USD was $10,000 or more at any point during the calendar year, whether you actually live outside of the US or not. For example, if you have an Irish current account which had €5k in it at any point during the year and an Irish savings account which has another €5k in it, you'd be over the $10k threshold (accounting for the exchange rate and all) and be required to file an FBAR for this year. The FBAR deadline is the same as the income tax deadline each year, though there is an automatic extension until October 15th of the same year if you miss the April deadline.

Even if you were over the $10k reporting threshold in previous years, it's not a huge deal; as long as you aren't currently under investigation by the IRS and they haven't already notified you of your delinquent FBARs, and you've been properly filing your US taxes and paying all US tax owed on your income from those foreign accounts (if any), you can file your delinquent FBARs now without being subject to any penalties. It would be best to get current ASAP if you do have delinquent FBARs you were required to file, though, as if the IRS or FinCEN were to notice and come after you instead, there could be significant penalties involved.

If you were never over the $10k aggregate threshold across all of your Irish accounts, though, then you aren't required to file, so there's no need to worry about it in that case.

Edit: Also, note that there is no additional tax liability on the assets reported on your FBAR (other than the tax you normally owe on any income generated by those assets, e.g. interest, dividends, capital gains on disposal, etc., which you should be reporting as income on your normal tax return anyway). Uncle Sam just wants to keep tabs on all of his money that you're hiding overseas... :pac:

lookyhere

I'm using Turbotax now to complete Form 1040, but the program is forcing me to fill in information for a state return too. This is probably because I filed a NYS tax return last year. Can I just ignore it when it comes to filing and just file the Federal return?

dennyk

Probably, but I couldn't tell you exactly how to do that with TurboTax to make sure you don't get charged for the state return. You can call their support line, though, and they should be able to help you out with how to disable the state return option.

lookyhere

dennyk wrote: »

Probably, but I couldn't tell you exactly how to do that with TurboTax to make sure you don't get charged for the state return. You can call their support line, though, and they should be able to help you out with how to disable the state return option.

Thanks Denny. I found directions to delete the state return. Federal return filed now.