Hi Board! I know that this isn´t a topic directly related to Madrid, but I am sure that it would be helpful to many of us Americans living and working in Spain. There are many American board members who lived and worked in Spain, so maybe you can shed some light on this confusing topic!

What is the legal requirements for US citizens living abroad when it comes to paying Federal Income Tax in the USA? With the start of the new year, and 2001 tax deadline being upon us sooner than we know it I am trying to understand my tax responsibilities.

I lived and worked in the USA as a single woman until the end of March 2001. I got married (to a Spaniard) in April 2001 and immediately moved to Spain. I have been working here in Spain since November. Do I owe taxes to the USA for the time worked here in Spain? Do I file as married? single? I am sooo confused. I have checked many expat sites, and they don´t see very clear (or I am just torpe) and my accountant in the US has never dealt with international tax situations.

Help!

BOOF! PLEASE!! Don't insult us!!! Remember, this is MadridMan's ALL SPAIN Message Board (see the proof, the title, above). Remember when I changed the name a couple months ago to better reflect the non-Madrid-specific focus?

Re: Taxes.... Have you checked www.SpainExpat.com already? I see they have a section on taxes with links. Here's what they say: Good luck! Saludos, MadridMan

[ 01-13-2002: Message edited by: MadridMan ]

Thanks for the link MM, I will check it out. This will probably be the only time that I say that I wish I "had" to pay taxes to the US right now" ha ha ha!! If only I was earning $76,000 here!! :p

According to my research the US has a treaty with Spain such that income earned is only taxed at the country where is is earned.
In other words, no you will not pay taxes in the US on income earned in Spain. If you report to the IRS that you have left the US and working abroad, you can get Social Security credits from income earned abroad, as if you are contributing to the Social Security system in the states.

Please contact the US Embassy in Madrid and ask for the booklet Tax Guide for Americans Abroad.

[ 01-13-2002: Message edited by: MadridMan ]

Hi. Chica,

Seul6 is right. I worked and paid taxes in both countries in '96. You pay where you work. The 2 IRS forms MM mentions are the crucial ones - 1116 and 2555. You won't be able to use the 2555EZ because you weren't there 12 months, but you can next year. If I were you, I'd go after getting these forms, along with the good ol' 1040, as soon as possible, just in case the embassy runs out. The IRS will accept a letter from your Spanish employer stating your income, tax payments and Social Security payments in lieu of a W-2 form for the Spanish part of your income. (You have to tell the IRS about it, even though you don't pay them taxes.) Be sure to continue to file the IRS forms every year, even if you don't earn enough to pay US taxes. Once the IRS has your Spanish address, they will send you all the forms you need every January.

Don't worry - they aren't hard to fill out.

As for filing as single or married, I'm not sure, but is your marriage recognized in the US? If you were married in Spain, it isn't automatically recognized in the US - you have to go through some red tape. If you were married in the US, I don't know if the marriage is recognized or not in Spain. I guess you would know if you have a libro de familia or not. Anyway, what I'm getting at is, if your marriage is not recognized in one of the countries, file as single in that country. (I'm afraid I'm not making much sense - or helping much here!)

Here's the scoop on the Social Security benefits, in case you're interested. I checked into this in the States. (The Social Security Administration has a publication specifically on the agreement between Spain and the US, and you can request it at any of their offices in the US, although they may have to order it themselves.) Neither country wants to know how much you paid into the other country's funds until you request benefits. At that time you tell them you worked in the other country, and then they contact their associates across the gran charco and get the info from them. So basically, it sounds like they do all the work, but they won't do it until it's necessary.

Hope that helps some!

Just thought I'd add to Diana's and others' great posts...
About the state taxes, you have to check with your state to see if they require you to file (if you're planning on having benefits such as in-state tuition, property, etc.) They all have their own rules and vary a lot from state to state. They may require you to file this year since you've worked there for at least part of the year.

Diana, what red tape do you have to go through to get your marriage recognized? I think mine's recognized but hey, who knows? My husband has a green card, I assume it has to be recognized to get that, right? Wouldn't that be funny! (or not)!

Nevado, I don't know what the red tape is. I never looked into it - just heard about it. It may not be complicated. Some of my American friends who are married to Spaniards did look into it. At least one specifically went through another marriage ceremony in Spain after the wedding in Colorado in order for the marriage to be recognized in Spain. Others, married in Spain, filed single in the US. Sounds to me like yours is recognized! Did you have to show a marriage certificate for your husband to get the green card? Maybe that's all that's needed. I'll bet someone on this board knows more about it!

Chica, it just occurred to me that you may also want to look into doing your US taxes with software. I used TurboTax last year for the first time, and I noticed it was equipped to handle the 1116 and 2555 forms. I was thrilled with how easy it was to file using the software.

Seul6, Diana and Nevado -

THANKS!! Your information is great and I will definitely follow up!

Now, to answer some of your questions...We got married in the US (in Pennsylvania) and had to go through the "red tape" to get the marriage legalized in Spain (MM we definitely have to do that webpage!!). The red tape consisted of me going to Harrisburg (Pennslyvania state capital) and having our marriage license stamped with an Apostille Seal...cost about $15 (or $25, who can remember, I paid so many stupid fees and they were always one or the other).

Once stamped, we took the license along with a copy of my passport, as well as Angel´s birth certificate, my birth certificate and a few other documents to the Registro General in Madrid to register the matrimony and apply for the libro de familia...which we now have (after a 4 month wait)...a crucial step in applying for my residency!

Of course, had we known it before hand, this could have all been avoided by presenting ourselves personally, along with the stamped marriage license at the Spanish Consulate in NYC (the Consulate that serves Pennsylvania) and they would have had the paperwork done in 3 days!!

Government works! When it wants to!!

My husband and I are going through this very process about having our marriage "recognized" in Spain. We wrote to the Spanish consulate here in CA and they sent us the forms to fill out. Along with the long form of your marriage certificate, I must provide a copy of my birth certificate as well as: (in Spanish)
-Un cuestionario para la declaracion de matrimonio al Registro Civil.
-Declaracion jurada de solteria de los conyuges. Notorized. Provided to you.
-Pasaportes
-Tarjeta de residencia o visado de estancia en Estados Unidos.
We were married four years ago, and up until about one month ago, I assumed our marriage was recognized in Spain, now that we have the paperwork completed, I will be afforded the same rights as any spouse, here or in Spain. Who knows, if we move back to Spain in the future, this process will already be completed and one less hassle for us.
Good Luck!

MM-I got off topic, so you can move this to a new thread if you see fit.


[ 01-14-2002: Message edited by: laduque ]

Hi.. I would like to know, if I file for divorce in the US, and since it takes so much time to finalize things, do I have to wait for the divorce to be final in the US to marry someone in Spain?
Thanks for any reply.

[ 01-16-2002: Message edited by: LittleWing ]

(psst! LittleWing, please check out the recent thread, " Marrying a Spaniard " in the "Working In Spain" forum.)

Let's try to stay on-topic here. Thank you!

Saludos, MadridMan

[ 01-15-2002: Message edited by: MadridMan ]

Lo siento Madridman. This was my first post, and didn't realize there was more on this subject , but that's ok, I will forgive you this time , because now I will be more careful next time(I hope ), so thanks for being understanding..jajaja (only playing) so SMILE!!! and thanks for the info. BTW-reading that post did not answer my question, so I guess I will have to do more research on this.....
Cuidate

[ 01-16-2002: Message edited by: LittleWing ]

Oh gosh, I think I'm still on the subject...I guess MM will tell me if I'm not. I married a Spaniard here in the states, we went to the Spanish Consul in LA, we took our birth certificates, our marriage licenses, and our recently born baby's birth certificate, and our passports. That was all they needed, within 5 days we had our libro de familia. They sure are on top of things there!

And so, mencey, how did this affect your taxes abroad?? Please see my posting with link above and please follow up in that thread about "Marrying a Spaniard". Thanks!