Ok, so I am not really the taxman. However, a few American that work with Cheryl (who also moved here in the fall) have been asking me through her, about how do file 2005 taxes since we live overseas. Well, we have never had very complicated tax returns because we don't own a house, not self-employed, and don't have any crazy investments. Well my friends, that all changes when you earn income in a foreign country.

Using the trusty services of Turbo Tax online, I tackled our 2005 tax return. Turbo Tax Online has a little "return ticker" in the top-left section of the webpage that shows what your return will be as you complete the return. I was quite pleased as I entered uur U.S. income, then I had to enter the value of our "free" trip to Hawaii thanks to the great show LOST to our local Dallas ABC affiliate. I saw our return value decrease a few hundred dollars.

Not great, but ok as we still were sitting VERY comfortable. Then came the British income. As I entered it in, I was hopeful. After I clicked "Continue", I saw my nice "return ticker" (that showed by return amount in green text I might add) rapidly plummet to a terrifying red text indicated we owed taxes for the first time ever. Ever.

So now I am scouring for any and all possible ways to at least break-even on 2005 taxes. It really sucks that not only do we pay a significant amount of tax in Britain and receive absolutely ZERO benefits, now we get double-taxed by the U.S. as well. Granted, next year this should not be a problem as we can exclude a large amount (if not all) of our foreign income as we have lived overseas for the entire year. Just not a fan of paying tax after getting a nice "bonus" each spring.


Only, if that darn baby would have just popped out last year ;)