Income taxes

I can't answer your question concerning compatability of the TurboTax program with a USVI filing, but I can give you a heads up on something:
We moved to STT mid-2002, which meant that we filed our 2002 taxes on-island, but submitted stateside W2s and W2-VIs. Last month we got a letter from the IRS stating that we had requested thousands of $$ in credit to be applied to our 2003 taxes--which we absolutely had not. I immediately got on the horn to straighten this mess out. Turns out that when you file in the USVI with W2s from the states, they have to have the US govt verify your withholding. However, they only send the feds certain info., which triggered the issuance of the letter.
Just thought I'd give you a heads up so you don't panic (like I did) when you get a letter from the feds misstating your taxes.
Good luck!

Onika, Thank you for the heads up. I am moving to the usvi in june/july and will come across this problem for my 2004 taxes. Is there anything I can do to eliminate this. When I have a permanent address, I was going to let the irs know, will this help at all?
Thanks

Linda

Hello Megan,

How did the move go? And working for the Daily News and did you get your cat down with you? I remember when you were deciding to move late last year and then someone posted a note that they saw your articles in the paper so we knew you had made the move. Hope it has worked out the way you wanted it to and if you feel like sharing let us know how you are finding island living.

As for taxes - yes Turbo Tax works for filing USVI taxes so does Tax Cut. Tax Cut had an option for USVI in their drop down as I recall and Turbo Tax I don't think did but you can fill it in and it recognizes it all the same I have used both sucessfully. I however have never had to do a tax return with half income from mainland and half from here so I don't know if that creates another issue in terms of using the tax programs.

Here is the information the IRB folks provide for residents of the USVI with income from both VI and Mainland:

If you are a bona fide resident of the Virgin Islands on the last day of the tax year, you must file your tax return on Form 1040 with the Government of the Virgin Islands and pay the entire tax due to the Virgin Islands. You do not have to file with the IRS for any tax year in which you are a bona fide resident of the Virgin Islands on the last day of the year, provided you report and pay tax on your income from all sources to the Virgin Islands and identify the source(s) of the income on the return. If you have non-Virgin Islands source income, you must also file Virgin Islands Form 1040 INFO, Non-Virgin Islands Source Income of Virgin Islands Residents, with the Virgin Islands Bureau of Internal Revenue. You can get Form 1040 INFO by contacting:

Virgin Islands Bureau of Internal Revenue
9601 Estate Thomas
Charlotte Amalie
St. Thomas, U.S. Virgin Islands 00802
The telephone number is (340) 774-5865.

Good Luck.

--Islander

I'm not suggesting that you actively seek out the IRS and let them know where you are. No offense to any auditors out there, but do you really want the IRS knowing about you unnecessarily?
Also, I am not sure if this problem is perpetual or just happened this year and to me. For example, I was not advised by IRB that I had to file a Form 1040INFO form as noted by Islander above. That may well have been the source of our problem, which, of course, you could avoid by filing the proper forms.

Note to self: Rely on Islander for assistance with future tax filings, NOT the staff at the IRB! Aargh!

Hello,

Onika - I found an article about taxes for VI and here is a quote (is this the letter you recieved?)

"A person who moves to the Virgin Islands will probably have had income in the United States for that part of the year before he or she arrived in the Territory. Alternatively, a person could have income from United States sources as well as from Virgin Islands sources, even after becoming a resident. For example, a person might have rented out a former residence, or may have installment sale business income from the sale of a United States business. A Virgin Islands resident who has taxable income from outside the Territory is required to file an additional information tax return, Form 1040INFO, with the VIBIR as an attachment to Form 1040, Form 1040A , or Form 1040EZ. Form 1040INFO reports items of non-Virgin Islands source income, such as rents, dividends, interest, alimony, and capital gains.

A taxpayer who becomes a Virgin Islands resident and files with the VIBIR should be prepared for a letter from the United States IRS Center where he or she filed in previous years, asking why no tax return was filed. It is a good idea for new residents to get a copy of their Virgin Islands tax filing package, stamped to show date and time of filing with the VIBIR, to provide the IRS if such an inquiry is received. "

Quote from article entitled "It's Tax Time in the VI: A Review of the Law for Individuals"

Onika/Islander,
Thanks for the information. I am keeping information on all this for my move. Again I won't come across this until later next year, but it is this type of information that we all forget since it is only annually.
I will take your suggestion and not inform the irs of the move until it is necessary.
thanks again everyone for the info.