[ush1blastyear]

Hi,

We left the US in August 2014. My husband and I were both on H1B and were in the US for 7 years.
If I understand correctly, we would still be resident aliens for 2014 and would have to report all our income, including income earned after leaving.
I also read, that one could apply for an early residency termination date. So in that case we would only have to report income up to the day we left. Is that correct?
How would we apply for this early termination date? Together with the return? Is this kind of application usually successful?
I'm not sure yet, what exactly we want to do, but since we have to pay taxes in our home country too, I just want to know all my options and then decide which is the best one for us.

[AtlantaTaxExpert]

You have TWO filing options. You can:

1) File an expatriate dual-status return; you and your spouse would have to file separate dual-status returns, and attach your own Residency Termination Statement claiming the date you departed the U.S. as your termination date. That allows you to claim ONLY your U.S.-sourced income, but you can claim only itemized deductions. These dual-status returns MUST be mailed, though you probably can efile the state returns.

OR

2) File a JOINT return as residents, claiming all world-wide income and claiming the Foreign Tax Credit (Form 1116) for income taxes paid to your home country. Filing jointly, you can claim the joint standard deduction, AND the joint return can be efiled. Your joint Residency Termination Statement (in which you would claim 31 December 2014 as the default termination date) must still be signed by both of you and mailed by 30 June 2015. Also, the joint state tax return can also probably be efiled.

Hopefully, you kept a U.S. bank account open so the refund can be direct deposited. This is important, as refund checks tend to get lost when they are mailed overseas.

[ush1blastyear]

Thank you for your quick answer. Yes, we did keep our checking account open.

[AtlantaTaxExpert]

Glad to help!

Please consider using my services when tax time arrives in January; you can contact me using the email address in my profile.