US Tax Filing & Compliance

[malcontent]

I cannot find if it's mandatory any more, but form 8938 used to be required and was noted on Sch B at the bottom of the page where the three tick boxes are and FINCEN is mentioned (dependent on which tick boxes were ticked yes). It's no longer noted on Sch B but I've been filing it with my return every year including this year (not filed yet but getting there shortly) as the form hasn't been redacted so I would assume it is still necessary.

Form 8938 is for FATCA and living abroad filing single or head of household, it only applies if you have more than US$300k in specified foreign assets any time during the year, or US$200k on the last day of the year. Social Security type assets like CPF are exempt, as is real estate unless it’s a rental property. Anything sitting in an account with Citibank here is also exempt because it is a US owned subsidiary of a US bank.

Oh, going with the change to MFJ as what I can gather I can just submit with the W-7 and certified identity docs (the reason I was at the Sg Academy of Law) and mail it using the private mail services like DHL to a special address in Austin, TX (special for ITIN initial applications).

Yes, the §6013(g) election is a smart move if your spouse is expected to have little or no income both now and in the future (and you aren’t tax sheltering any serious investments under their name).

You will have to attach an extra page to your return for the first time, you can find plenty of §6013(g) election templates online. Last time when my brother brought his Filipina wife to the US he had to make a §6013(h) election, which is for first year residents. No templates online for that one, so I made one for him.

[malcontent]

I'm still thinking about renunciation as well after all these years. I only have three living blood relatives in the US. Got five here and all are mine. What's to go back for? Seriously thinking about it now. I just need a trigger to pull as I did some reading about it recently and I don't think I would have any tax issues as I've never seen the kind of money they are talking about, taxation wise.

I would look before you leap. Renunciation costs $2350, but after renunciation, you will become a nonresident alien… that will cost you 30% withholding tax on 85% of all future social payments. You can read more about that here:

https://www.ssa.gov/international/Alien ... nce_2.html

[Lisafuller]

I'm still thinking about renunciation as well after all these years. I only have three living blood relatives in the US. Got five here and all are mine. What's to go back for? Seriously thinking about it now. I just need a trigger to pull as I did some reading about it recently and I don't think I would have any tax issues as I've never seen the kind of money they are talking about, taxation wise.

I would look before you leap. Renunciation costs $2350, but after renunciation, you will become a nonresident alien… that will cost you 30% withholding tax on 85% of all future social payments. You can read more about that here:

https://www.ssa.gov/international/Alien ... nce_2.html

I had no idea renunciation cost money. Just assumed you submit the relevant forms and boom.

[Lisafuller]

Just reading this had my head spinning.

Yep, you are not alone. I helped my brother do his taxes yesterday and his head almost exploded. It’s no wonder so many Americans overseas want to renounce and be done with it.

The “free file” software that the IRS touts, the providers have so many gotchas that you can almost never file for free. They are really unscrupulous.

Knowing the IRS doesn’t like paper returns gives me added incentive to give them paper! Serves them right.

The American tax system is IMPOSSIBLE. I would stick it to them with the paper too, if I didn’t have to go through all the trouble of mailing.

[Lisafuller]

I'm still thinking about renunciation as well after all these years. I only have three living blood relatives in the US. Got five here and all are mine. What's to go back for? Seriously thinking about it now. I just need a trigger to pull as I did some reading about it recently and I don't think I would have any tax issues as I've never seen the kind of money they are talking about, taxation wise.

Don’t you still feel a connection to the states though? What would the benefit of renouncing at this juncture be for you? I’d say if its not broke don’t fix it, having PR here and citizenship there is a pretty good place to be.

[Lisafuller]

I just finished, except for final checks…

1040
1040 schedule 1
1040 schedule b
1040 schedule d
2555
8949 (cap gains/losses)
8606 (backdoor Roth)

Fortunately no pesky foreign tax credits to deal with this year.

I’m still sitting on the fence about the backdoor Roth this year. Based on the proposed changes in the yet-to-be-passed build back better bill, I may have to do a deductible and then make a taxable conversion - from what I can tell, the income and deduction should offset one another, so it seems I can still use the backdoor and then do a little dance.

Interestingly, I will get a $100 refund this year, money that is “leaking” out of my SRS account, because they send the IRS 30% dividend withholding on S27 shares (SPY but traded on SGX). I get a 1099-DIV from UOB, so I can get back that withholding, because 30% only applies to non-US investors.

Don't forget FINCEN!

Wow, as if the list wasn’t already long enough

[malcontent]

Wow, as if the list wasn’t already long enough

I’m dreading next year, my employer reinstated our bonus… and more money = more problems.

I will need to file the dreaded Form 1116 again. This is to claim foreign tax credits… it makes all the other forms seem like a walk in the park. The first time I filed form 1116, it took me several weeks spending hours each day to understand it all. Even the best tax experts struggle with it.

[Lisafuller]

Ahh, the notorious 1116. I still struggle with filing even the more basic forms like 2555, all the numbers are too much for me.

[malcontent]

Worst part with 1116, you need to computate 10 full years of unused carryovers and excess limits. It’s almost like filling out a 1116 for each of the 10 years retroactively, but worse because you have to figure it all out on your own with a bunch of mind bending calculations and cryptic terminology. I spend hours online trying to find a good/simple explanation, there is nothing out there that is complete or simple.

[sundaymorningstaple]

I'm still thinking about renunciation as well after all these years. I only have three living blood relatives in the US. Got five here and all are mine. What's to go back for? Seriously thinking about it now. I just need a trigger to pull as I did some reading about it recently and I don't think I would have any tax issues as I've never seen the kind of money they are talking about, taxation wise.

Don’t you still feel a connection to the states though? What would the benefit of renouncing at this juncture be for you? I’d say if its not broke don’t fix it, having PR here and citizenship there is a pretty good place to be.

And that, my friend, is what keep stalling me. Adding to the fact that I once signed my life away to the country if it needed me to give my life for it. It doesn't seem like much to someone who may never have done a war, but the impact in my head is for ever and that is where I keep tripping over what seems to be a major mental stumbling block. If I can get this year's return across the hurdle of switching from MFS to MFJ, I might see things in a different light. But it really chaps my butt that I have to pay taxes on my SS.

[sundaymorningstaple]

I finished up my return late yesterday evening, Only need to make a hard copy as a back up to the copy on my PC. Main copy is ready for signatures and mailing. I think I'm going to invest in a bus fare out the DHL spot near the airport to do a private delivery. They can also give me written notification on mailing and delivery dates and it gets the return where it needs to go in a couple of days or faster if I want to pay for it! All my current headaches were because the IRS closed up shop after covid hit in 2020 for 6 months. I had know way of knowing if my return & cheque for payment of taxes at arrived and at the end of May I got worried so I made an electronic payment (e.g., a double payment) Then in early August I saw my cheque that was attached to the return had been presented to the bank for payment. Then I got a bill for additional taxes and the crap just rolled forward and ultimately impacted the 2020 return which is still not finalized how much refund I was supposed to get. I know as of Oct 2020 I was supposed to get over $300 refunded or carried forward. So had to attach explanation so the next dunderhead at IRS will possibly have some idea where to start looking.

[malcontent]

My brother just got the refund for his 2019 return… so yeah, anything outside of the ordinary is going to take an extraordinarily long time to resolve! Just have to trust it will shake out eventually, give it a year… or three!

I’ve always sent my return through standard mail via Singpost, and it’s always gotten to them without fail all these years. I took a picture of myself dropping it in the post box last year, $2.45 in postage.

[sundaymorningstaple]

I do the same thing, but it never got to the other end or at least opened. That's the problem. It appeared it didn't get opened until August some time based of the presentation of the cheque. But I have to ensure it's on time and early enough for the ITIN to be issued (they will insert in on my tax return at the ITIN centre in Austin, TX if all is okay.

[malcontent]

I do the same thing, but it never got to the other end or at least opened. That's the problem. It appeared it didn't get opened until August some time based of the presentation of the cheque. But I have to ensure it's on time and early enough for the ITIN to be issued (they will insert in on my tax return at the ITIN centre in Austin, TX if all is okay.

Yeah, I read they still currently are sitting on millions of unopened snail mail, so no matter what you do - it’s going to be slow and agonizing.

Interestingly, my brother (the trucker) who recently passed away hadn’t filed a return since the early 1990’s and didn’t give a flying you know what about it. He claimed he owed more than he could ever repay — in reality he was probably owed decades of refunds but didn’t flipping care (he was an anti-vaxxer with a good supply of guns and MRE’s at home!). Surprisingly, the IRS doesn’t seem to pursue these recalcitrant taxpayers, at least not aggressively.

[Lisafuller]

I do the same thing, but it never got to the other end or at least opened. That's the problem. It appeared it didn't get opened until August some time based of the presentation of the cheque. But I have to ensure it's on time and early enough for the ITIN to be issued (they will insert in on my tax return at the ITIN centre in Austin, TX if all is okay.

Yeah, I read they still currently are sitting on millions of unopened snail mail, so no matter what you do - it’s going to be slow and agonizing.

Interestingly, my brother (the trucker) who recently passed away hadn’t filed a return since the early 1990’s and didn’t give a flying you know what about it. He claimed he owed more than he could ever repay — in reality he was probably owed decades of refunds but didn’t flipping care (he was an anti-vaxxer with a good supply of guns and MRE’s at home!). Surprisingly, the IRS doesn’t seem to pursue these recalcitrant taxpayers, at least not aggressively.

The thought of getting charged is what compels the rest of us to file, without it we’d be just like the tax evaders.