Weekly Q&A #1

Gabriel: I get a stipend (over USD$9k) for my postgraduate program n the UK – does this need to be reported as income? All the info I could ever find about scholarships was for those awarded n the US. It s not taxed or anything here.

Locus Tax: Postgraduate program + UK + scholarship sounds like a great combination. I assume you are very excited. To answer your question, if the stipend is related to your service of any kind, it is subject to income tax, and if not, if it is pure subsidy or scholarship, it is not taxable.

Gabriel: Related to service how? It s not like the US where you’d have to work as a TA to earn the money, it’s given to us basically as a salary/stipend so that we can study full time without needing to take paid work. The only way they assess the scholarship each year is that you’re making adequate progress in your studies (PhD supervisor report).

When I do start working, is it just this 1040 form I’d have to submit? I already do the bank account report (I was delinquent for a few years – didn’t know I needed to – but caught up; should I have gotten any sort of confirmation when the FBAR was accepted? only ever got the submission receipt each year).

One more question! If I open a joint bank account with my partner (UK citizen), is there anything we’d need to do besides me, include it on my FBAR? It would just be to pay rent/combined expenses out of, we’d still have individual accounts for income to go through.

Thanks for your help! I’ve never lived n the US so trying to figure out all these tax rules without even that frame of reference s very confusing.

Locus Tax: It sounds like that wouldn’t be considered an income. If it is given with service, it would likely be an income. Generally there is no acceptance confirmation for FBAR filing.

If there s any income from the bank account itself like the interest payment, you would have to include that in your US tax filing.
Hope it helps!

Manny: Hey! I am 22, living n Japan. What forms do I need to file? I have no dependents, unmarred, don’t own any houses or anything, only income from one job in Japan, been out of the country for more than a year, never have had more than $10k in an overseas bank. Thanks! 😀

Locus Tax: It sounds like all you need to file s 1040, assuming your salary is deposited to your Japanese bank account but the amount never exceeded 10K at any point. I would take a look at foreign earned income exclusion or foreign tax credit that you may qualify depending on your qualifications (current income and others). Let me know if you have more questions and feel free to message or comment further!

Daly: Any general recommendations for first timers? I just moved to Germany about 6 months ago. I’m start to investigate what all I need to do for taxes and to consult with a professional.

Locus Tax: Congrats on your new decision to live abroad. I can only give you a very general answer for this question, but I guess that’s what you are looking for. Well, there are filing requirements such as 1040, and FATCA, and FBAR f you have accounts n Germany. Whether you have to file for FATCA or FBAR depends on different requirements the IRS lays out. I’d start with looking at those two first.

Depending on your income level and your employment status, you can qualify for foreign earned income exclusion and foreign tax credit. So I’d also recommend that you look at those benefits. If I know the situation in details, I can give you more of an accurate assessment to you personally. You can message and comment further if you’d like!