In 2022 I did post doc in Washington D.C. while living in D.C. from Jan, 2022 until September 2022. Then moved to UK to start another post doc. Earned post doc stipend from UK university from October until December 2022. I use my parents' address in CA as my permanent address. I spent no time in 2022 living in CA. I have some investment income from Vanguard. Am I correct about the following: I will file 2022 IRS return reporting all 2022 income including that earned in UK. I will file D.C. state income tax return for income earned while living in D.C. I will need to file tax return in UK for the post doc stipend earned in UK. I will report my investment income in my D.C. state tax return. I will receive some tax credit either from IRS or UK for reporting my UK post doc stipend on both returns.
Thank you.
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Your hypotheses are all correct, as long as a few little assumptions I’m making are also correct (!). Since your parents live in California, I’m guessing that you’re either a U.S. citizen or resident, so reporting worldwide income here is applicable. And since you concluded your work in the U.K. in December, I’m assuming you then returned to Washington D.C., where you’re now staying, so that the Foreign Earned Income Exclusion (discussed here) would be irrelevant, as it requires a longer stay. (The part I can’t make any assumptions about, or even comment on, is the filing obligation in the U.K., since that’s a completely different tax world!)
I do have some additional thoughts which might be helpful, mostly on your state scenario. First, if you use your parents’ California address on your U.S. 1040, the state of California may contact you to ensure that your income isn’t taxable there (which shouldn’t be a huge deal—just something to be aware of).
Also, since you left their state for just a few months and returned (see assumption above), D.C. will consider you to have been a resident there all along (states are aggressive that way about temporary foreign income), and tax you on the stipend from the U.K. in addition to the income which you actually earned in their state. But this takes place somewhat automatically in the TurboTax program, as it starts the state module with your federal AGI (and as long as you don’t enter the stipend on the “subtractions from income” page you’ll eventually come across, you’ll avoid headaches later).
As long as you’re a U.S. citizen and paid tax in the U.K., you would likely be eligible for the “Foreign Tax Credit,” which I believe you’re already on top of. You’ll see this as you go through the interface (but here’s a TurboTax article on the process), and we’re here to help if needed (it can be a little tricky!).
I hope this helps, @sfowjr66!
Your hypotheses are all correct, as long as a few little assumptions I’m making are also correct (!). Since your parents live in California, I’m guessing that you’re either a U.S. citizen or resident, so reporting worldwide income here is applicable. And since you concluded your work in the U.K. in December, I’m assuming you then returned to Washington D.C., where you’re now staying, so that the Foreign Earned Income Exclusion (discussed here) would be irrelevant, as it requires a longer stay. (The part I can’t make any assumptions about, or even comment on, is the filing obligation in the U.K., since that’s a completely different tax world!)
I do have some additional thoughts which might be helpful, mostly on your state scenario. First, if you use your parents’ California address on your U.S. 1040, the state of California may contact you to ensure that your income isn’t taxable there (which shouldn’t be a huge deal—just something to be aware of).
Also, since you left their state for just a few months and returned (see assumption above), D.C. will consider you to have been a resident there all along (states are aggressive that way about temporary foreign income), and tax you on the stipend from the U.K. in addition to the income which you actually earned in their state. But this takes place somewhat automatically in the TurboTax program, as it starts the state module with your federal AGI (and as long as you don’t enter the stipend on the “subtractions from income” page you’ll eventually come across, you’ll avoid headaches later).
As long as you’re a U.S. citizen and paid tax in the U.K., you would likely be eligible for the “Foreign Tax Credit,” which I believe you’re already on top of. You’ll see this as you go through the interface (but here’s a TurboTax article on the process), and we’re here to help if needed (it can be a little tricky!).
I hope this helps, @sfowjr66!
Dear RalphH1:
Many thanks for your kindness in replying to my questions. I am very grateful for your knowledge and advice.
Regards and I wish you well.
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