I am a US citizen, living for 40 years as a resident of the UK. My tax home is UK. I have never filed a US tax report and nee to come into compliance with the Streamline Foreign Offshore procedure. I have foreigned earned income which I can exclude. But I also have two pensions, an NHS and UK Gov as I am 70 years old. I pay UK tax on my UK pensions, but see nowhere on form 1040, or 2555 to get a tax credit for tax I have paid on these pensions. The same is true for rental income. Can you help. Thank you.
FORM 1116 FOREIGN TAX CREDIT which is available on the IRS web site. The IRS web site also has publication 514 which explains the the form and the taxes. Both are free. The IRS form 514 should cover the rental income. The fact that concerns me is that you have never filed a tax return and now you are retired. It would be a very good idea, no it must be an action to determine your tax liability before you do anything. If you earned little enough you may never have hit the minimum amount where the tax kicked in, However it is not really difficult to wind u in taxable territory and tax returns that are never filed covered taxes that are never timed out by a statute of limitations. Get professional advice before you contact the taxing authorities.
Every thing that I am saying here is my opinion and it is not based on any particular case. My response is just unsupported general information. If it helps you to resolve an issue that's great but do not rely on it as legal advice because it is not based on the facts in your case and it is not based on any specific legal research. Answering this question creates no relationship between the writer and reader of the writing. I am not your attorney now, nor have I been on the past. If you just want to comment please do that on AVVO where the price is $0.00. I do typically respond to all AVVO comments.
You should consult a tax attorney with international tax experience to review your eligibility for the Streamlined Procedures, to be on the safe side. Lately, I have declined to accept three clients in your posture, because I ascertained they had too much criminal tax exposure and not eligible for the plan. Good luck.
You work through form 1116 to determine your potential credit and then it gets transferred to form 1040 after your tax is determined. Can't apply a credit to tax without first knowing what the tax is.
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