topic Can I use TurboTax if I now live in the US Virgin Islands? in Deductions & credits

Can I use TurboTax if I now live in the US Virgin Islands?

kimmyntx — Thu, 06 Jun 2019 09:01:26 GMT

I moved here from Texas in October 2016. I have a W2 from Texas and the USVI.

Unfortunately no, you will not be able to use TurboTax t...

DS30 — Thu, 06 Jun 2019 09:01:27 GMT

Unfortunately no, you will not be able to use TurboTax to file both your US and USVI income tax return.

TurboTax does not support this type of tax filing.

Here is some information that may help you with your US and USVI filings.

When preparing your 1040, ywould report the W-2VI just like a W-2 except do NOT report Box 2 amount as federal withholdings (you will need to do some additional allocations related to your VI income).

Since the amount listed on your W-2VI in box 2 is VI income tax withheld instead of US federal income tax withholdings, do not report this information when inputting your W-2VI. The taxes paid to the U.S. Virgin Islands are not deductible on either a Federal or U.S. Virgin Islands return. Instead, these taxes paid to the U.S. Virgin Islands are a refundable credit on the Federal or U.S. Virgin Islands return. Also, do not put the VI income tax withheld shown in Box 2 as Box 17 state income tax withholdings.

Since you do not qualify as a “bona fide resident” of the U.S. Virgin Islands, you will need to do the following in order to file your Form 1040.

You will need to split your tax due between the United States and the U.S. Virgin Islands. Get a copy of Form 8689 Allocation of Individual Income Tax to the U.S. Virgin Islands from the IRS website. http://www.irs.gov/pub/irs-pdf/f8689.pdf. This form is not supported by TurboTax.

Fill out Parts I and II with the amounts from the Virgin Islands only that you identified when collecting your information. Do the calculation in Part III. This is the portion of your total tax that is paid to the U.S. Virgin Islands. Finish Form 8689 Part IV using amounts paid to the U.S. Virgin Islands. Ignore line 40. You now need two “identical” tax returns.

Credit for U.S. tax paid to the USVI. You can take a credit on your U.S. return for the U.S. tax allocated to the USVI only if you actually paid the tax to the USVI. To take the credit, you must complete Form 8689 and attach it to your Form 1040. Add line 40 and line 45 of Form 8689 and include the amount in the total on Form 1040, line 74. On the dotted line next to line 74, enter "Form 8689" and the amount paid.

On the Form 1040 that will go to the IRS, put the amount from Form 8689 line 35 on Form 1040 line 53 c “8689”. Calculate your total payments to the IRS, Federal income tax withheld from Forms W-2, etc., and fill out Form 1040 lines 61 through 76 using Federal amounts. Place Form 8689 in the return in attachment sequence order (85). Sign and date Form 1040 on page 2 and mail to the IRS Service Center Austin, TX 73301-0215.

If you are including a check or money order, file your original return with the Internal Revenue Service, P.O. Box 1303, Charlotte, NC 28201-1303 USA.

On the Form 1040 that will be filed with the Virgin Islands Bureau of Internal Revenue, put Form 8689 as the first page of the return (on top of Form 1040 page 1). Ignore Form 8689 instructions to put amounts from lines 40 (which should be blank) and 44 on Form 1040 line 71. (We are giving you the official V.I. Bureau of Internal Revenue instructions.) Sign and date the return.

File a signed copy of your Form 1040 (with all attachments, forms, and schedules, including Form 8689) with the Virgin Islands Bureau of Internal Revenue, 6115 Estate Smith Bay, St. Thomas, VI 00802. They will accept a signed copy of your U.S. return and process it as an original return.

You can prepare your US Virgin Islands income tax return...

harrpatr — Thu, 06 Jun 2019 09:01:29 GMT

You can prepare your US Virgin Islands income tax return using TurboTax. That's why TurboTax sells so many software programs in local stores. If you need to prepare two "identical" returns like I have been doing for years, (I get a GERS pension which is USVI

source income as a retired Administrative Law Judge) you...

harrpatr — Thu, 06 Jun 2019 09:01:30 GMT

source income as a retired Administrative Law Judge) you can prepare the returns using TurboTax, adding Form 8989 manually in attachment sequence order in the copy that goes to the IRS and as the first page of the return that goes to the VIBIR.

You will not be able to efile either return through TurboTax. The VIBIR does not support electronic filing and TurboTax does not support electronic filing of Form 8689. Form 8689 is a form that can be filed with the IRS electronically; however if you prepare your return using TurboTax, you will have to pay someone other than TurboTax to submit the return to the IRS electronically.

I started submitting taxpayer returns electronically the first year electronic filing was available in Southern California. I believe I was one of the first taxpayers or tax preparers to point out to the the Director of the VIBIR that the "official" IRS instructions on Form 8689 are incorrect, as noted above.

Harris Angell

P.S. Put all the W-2 Federal withholding and other prepayments and W-2VI withholding and other USVI prepayments in the Federal income tax TurboTax input. Do not put Virgin Islands tax payments in state tax payments. However, put state tax prepayments in the state tax input (this does not apply to Texans or residents of any other state that does not have a state income tax). The USVI is a territory, not a state (IRC sec,7701 (a)(9). If you only file with the VIBIR, the return will come out correct for filing. Any Self-Employment tax needs to be overridden to zero on page two, and only on page two of Form 1040 (one half of self-employment tax is an adjustment to income in the USVI), and Form 1040 needs to be prepared and filed using the figures generated by TurboTax. If you file with both the VIBIR and the IRS the total tax prepaid will come out correct, You will do the allocation when you prepare Form 8689.

Errata: Self employment tax paid by USVI residents is cal...

harrpatr — Thu, 06 Jun 2019 09:01:38 GMT

Errata: Self employment tax paid by USVI residents is calculated and filed on Form 1040SS not Form 1040.

Thank you. This certainly helps.

krugbt — Thu, 06 Jun 2019 09:01:39 GMT

Thank you. This certainly helps.

Re: Can I use TurboTax if I now live in the US Virgin Islands?

Anonymous — Wed, 02 Oct 2019 16:56:04 GMT

No. Intuit only does US and Canada tax returns.

The US Virgin Islands (USVI) has its own tax system. It is based on the same tax laws and tax rates that apply in the US. The taxation is contingent on whether you are a bona fide resident of the USVI during the entire tax year.

For information about filing your USVI tax return or about Form 1040 information in St. Thomas or order tax forms, you can contact:
Virgin Islands Bureau of Internal Revenue
6115 Estate Smith Bay
Suite 225
St. Thomas, USVI 00802

You can access the USVI Bureau of Internal Revenue's website at http://bir.vi.gov/

You can phone the Bureau at the phone number listed on their site: 340-715-1040.

You can order forms and publications through fax. The fax number is listed on their site as well under the "Contact Information.": 340-774-2672.

Website Contact Information: http://bir.vi.gov/Contacts.html

Re: source income as a retired Administrative Law Judge) you...

bpackard416 — Sat, 13 Mar 2021 21:30:37 GMT

Hi,

You seem rather knowledgeable with the USVI taxes. My brother lives and works there but is a US citizen. He generally uses Turbo Tax to create form 1040, he never mentioned form 8689 but it's sounding like I need to file that? He is an independent contractor, so with all of the tax changes & PPP loans, I have decided to take over.

If you or anyone has any knowledge regarding the different stimulus packages and how they affect tax filings in USVI, please let me know. Thank you!!

Re: source income as a retired Administrative Law Judge) you...

ReneeM7122 — Mon, 15 Mar 2021 14:16:02 GMT

The stimulus is not considered taxable income and is not includable in your gross income. It should not have any effect in USVI taxes.

@bpackard416

Re: source income as a retired Administrative Law Judge) you...

ErnieS0 — Mon, 22 Mar 2021 01:25:08 GMT

You can use TurboTax Desktop\CD to prepare your brother’s return. He does not need to file Form 8689 if he lived and worked in the Virgin Islands all year. Form 8689 is used to split U.S. and USVI income.

As @harrpatr said your brother would also have to file Form 1040SS, which TurboTax does not support. You will have to remove self-employment tax form from page 2, line 23 of Form 1040 (it will be reported on Form 1040SS). That can be done with TurboTax Desktop\CD.

Re: source income as a retired Administrative Law Judge) you...

pandragonmom — Fri, 30 Jan 2026 01:13:11 GMT

I too am a Virgin Islands self-employed businessperson. I've used TurboTax for years, overriding to remove the self-employment tax from my 1040 and filing a 1040-SS separately for self-employment tax. The problem is that it's more difficult every year to override the self-employment tax from the 1040.

Intuit should address this!

It's also a hassle to set up estimated payments for the following year, as withholding and FICA are filed separately, to VI and IRS.

Any ideas for how to remove the SE tax from the 1040 for 2025 taxes?

Re: source income as a retired Administrative Law Judge) you...

DaveF1006 — Fri, 30 Jan 2026 22:37:36 GMT

Yes, you can do this but you would need to have the TurboTax Home and Business version. Once you enter the information about your self-employed income, you would need to override the self-employment tax and report it as zero. You won't be able to electronically file the return and you will need to send a written statement along with the return. Here is how to override the amount.

Once you enter your data, go to the forms mode on your return. Go to Sch SE.

Scroll to line 12 on the form, right click the mouse, and select override. Then enter zero in the box. The amount will appear in red. Because TurboTax does not automatically include the necessary exemption notation, you must write "Exempt, see attached statement" on Schedule 2, line 4, by hand after printing the return. The attached statement is something you would include with the return to explain why you are exempt from SE tax.