Taxes in the US
Discussion
Seems like everyone here is talking about completing their tax returns and getting refunds at the moment. I've been in the US 7 months now on full PAYE (or it's equivalent here) and have no idea if I am supposed to fill in a return or how I would do this? Should I be sent a form or something? I'm inclined to think I've not been in the US long enough yet or for a complete tax year to warrnat filing.
Anyone have any advice?
EDIT: Seems like the IRS website sayd I need to file, so I will contact a local tax office.
Anyone have any advice?
EDIT: Seems like the IRS website sayd I need to file, so I will contact a local tax office.
Edited by Viper_Larry on Wednesday 12th March 20:26
Find a CPA, one who is versed in International tax laws as well who will complete the filing for you.
You have the joys of FBAR and declaring all foreign income to look forward to. One of the guys who works for me is also a Brit - he got some very bad advice from a CPA when he first moved, didn't declare his UK interests correctly and ended up with pretty severe penalties.
You have the joys of FBAR and declaring all foreign income to look forward to. One of the guys who works for me is also a Brit - he got some very bad advice from a CPA when he first moved, didn't declare his UK interests correctly and ended up with pretty severe penalties.
Short answer is that you need to file a tax return.
I would gather your 1099s, details of expenses you incurred in the UK with housing, packing up to move to the US, costs incurred renting your home out and the income less fees and mortgage. After that hire a CPA who has done the work of international transferees. I was lucky - PWC did my taxes for a couple of years when I came over, which must have cost a fair bit. Luckily I was not footing the bill.
I would gather your 1099s, details of expenses you incurred in the UK with housing, packing up to move to the US, costs incurred renting your home out and the income less fees and mortgage. After that hire a CPA who has done the work of international transferees. I was lucky - PWC did my taxes for a couple of years when I came over, which must have cost a fair bit. Luckily I was not footing the bill.
And don't forget the UK tax you have already paid as that will be a tax credit, that will help enormously.
If you have a problem getting everything together, don't panic, just tell your guy to file an extension. Better to get it right first time than refile.
It is quite possible you will actually get a refund the first year because of one off deductions.
You don't need a "super accountant" just a good one, stay away from the shop front guys, expect to pay $250 +
If you have a problem getting everything together, don't panic, just tell your guy to file an extension. Better to get it right first time than refile.
It is quite possible you will actually get a refund the first year because of one off deductions.
You don't need a "super accountant" just a good one, stay away from the shop front guys, expect to pay $250 +
The US taxes on foreign income, although tax treaties ensure you aren't double taxed. You do need to declare all foreign income, that includes interest earned on bank accounts, rental income etc etc.
You also need to make an FBAR declaration on any foreign financial interests you might have as per the following:
http://www.irs.gov/Businesses/Small-Businesses-&am...
To reiterate what I said in my previous post it is important you get sound advice from a CPA that understands tax filings for foreign nationals. The penalties for not declaring correctly are severe over here.
As a reference due to the added complexity of my foreign filings I pay circa $900 to my CPA - do not do an H&R block $200 filing, it will probably end in trouble if you do have foreign financial interests.
You also need to make an FBAR declaration on any foreign financial interests you might have as per the following:
http://www.irs.gov/Businesses/Small-Businesses-&am...
To reiterate what I said in my previous post it is important you get sound advice from a CPA that understands tax filings for foreign nationals. The penalties for not declaring correctly are severe over here.
As a reference due to the added complexity of my foreign filings I pay circa $900 to my CPA - do not do an H&R block $200 filing, it will probably end in trouble if you do have foreign financial interests.
Viper_Larry said:
Eh? What has my earnings in th UK got to do with paying taxes in the US? Surely it's just based on what I earnt in 2013 in the US? This isn't sounding good
Ha ha ha ha! Breathe. Ha ha ha ha. Want to know something even better? If you become a citizen you will have to pay US taxes on income AFTER you leave the country for ever.
dvs_dave said:
Essentially if you have foreign financial accounts with a total worth of over USD10,000 you have to declare it. Less than that there is no need to declare.
The only thing I have over that amount is Premium Bonds - does that count? Going to see a Financial Advisor next Tuesday.Viper_Larry said:
dvs_dave said:
Essentially if you have foreign financial accounts with a total worth of over USD10,000 you have to declare it. Less than that there is no need to declare.
The only thing I have over that amount is Premium Bonds - does that count? Going to see a Financial Advisor next Tuesday.I think the term used is beneficial interest.
Which would of course include funds in an somebody elses name but fully or partially owned by you.
So it will be your UK earnings from 1/1/13 'til you left.
US earnings up to 12/31/13
You may have to dispose of any UK based Unit Trust/Mutual funds as they cannot be held by US residents because of the way they deal with Cap Gains within the fund. (undistributed)
Your Tax paid in UK will be applied as a Tax Credit so it will probably all work out quite well.
Once your relocation expenses are added there is an excellent chance you will be seeing a refund.
Only those expenses not reimbursed.
If you don't own a business, US taxes are not that complicated.
Which would of course include funds in an somebody elses name but fully or partially owned by you.
So it will be your UK earnings from 1/1/13 'til you left.
US earnings up to 12/31/13
You may have to dispose of any UK based Unit Trust/Mutual funds as they cannot be held by US residents because of the way they deal with Cap Gains within the fund. (undistributed)
Your Tax paid in UK will be applied as a Tax Credit so it will probably all work out quite well.
Once your relocation expenses are added there is an excellent chance you will be seeing a refund.
Only those expenses not reimbursed.
If you don't own a business, US taxes are not that complicated.
h0b0 said:
Ha ha ha ha! Breathe. Ha ha ha ha.
Want to know something even better? If you become a citizen you will have to pay US taxes on income AFTER you leave the country for ever.
Honestly this is one of the main reasons I still haven't naturalized. And it really fWant to know something even better? If you become a citizen you will have to pay US taxes on income AFTER you leave the country for ever.
king annoys me that the US continues with this extraterritorial taxation horsest even though I don't currently have any money anywhere else. It's the principle of the thing!Dr JonboyG said:
Honestly this is one of the main reasons I still haven't naturalized. And it really fking annoys me that the US continues with this extraterritorial taxation horsest even though I don't currently have any money anywhere else. It's the principle of the thing!
This is exactly the same for me! king annoys me that the US continues with this extraterritorial taxation horsest even though I don't currently have any money anywhere else. It's the principle of the thing!pasogrande said:
What difference does naturlization make?
I'm a permanent resident right now; if I move to a different country my obligation to pay taxes to the US ends. If I become an American citizen and then move to a different country, I will continue to have to pay American taxes (minus whatever I've paid in the country I'd be resident in up to a certain point) for the rest of my life. Then again I am married to an American so if we did move somewhere else she'll have to keep paying the iRS regardless.
Viper_Larry said:
he only thing I have over that amount is Premium Bonds - does that count? Going to see a Financial Advisor next Tuesday.
Hey Viper_Larry, I'm in the same situation as you. New immigrant to the U.S and filing taxes for the first time. I have premium bonds in the UK which exceed the FBAR / FACTA limits. Please can I ask what you found out in relation to premium bonds? Did you tell NS&I you had moved to the US? Thanks in advance!Premium bonds are illegal in the US. If you update your address for the bonds they will send you a letter telling you they have switched to a conventional account. I know this from experience! It is because they are classed as a lottery that is not regulated in the US. My kids have bonds but they are in my father's name in the UK.
In regards to the US taxing income in other countries. Ask good old Boris how he feels about it. He sold a house in the UK and had to pay the US government for the privilege
London Mayor Boris Johnson has settled a US tax bill he had previously described as "absolutely outrageous".
In regards to the US taxing income in other countries. Ask good old Boris how he feels about it. He sold a house in the UK and had to pay the US government for the privilege
London Mayor Boris Johnson has settled a US tax bill he had previously described as "absolutely outrageous".
I'd heard that is was US Postal Service laws that were the problem. This entry on a Wiki Talk page refers to the same:
http://en.wikipedia.org/wiki/Talk%3APremium_Bond#U...
UK Lottery illegal in the USA
A friend who is a UK citizen resident in the USA tried to buy UK Premium Bonds but was told by NS&I,
"The US Postal Service Law Department has told us it is an offence against their Lottery laws to use the mail service for Premium Bond correspondence. This includes Premium Bond prizes.
They have asked us not to break their laws and we have to respect that request as far as we can. Due to this law I regret to inform you that you can not invest into, or hold, NS&I Premium Bonds from the United States of America.
Even if you gave us a receiving address outside the USA, it would not be a solution because we would still need your signature for a prize win."
All my correspondence with NS&I, winning notifications, everything is done online via email. If I win a prize it's sent via BACS to my UK bank account. Surely it can't be in breach of US postal laws if nothing is sent through the post? If I were to win big I'd be on a plane back to the UK to collect.
Actually as I'm typing I've just seen that NS&I have updated their guidance and maybe I'm OK...
http://nsandi-adviser.com/resources/useful-informa...
Premium Bonds
A client living outside the UK should check whether local regulations permit them to hold Premium Bonds. For example, the US has strict gaming laws which MAY mean it isn’t possible or practical to hold Premium Bonds while living there. Where Bonds are permitted, your client will need to apply by post, then register for our online and phone service to manage their holding. Your client will need to have a UK bank account that can receive BACS transfers, and any prizes they win will be paid in Sterling.
What happened with you Viper_Larry?
http://en.wikipedia.org/wiki/Talk%3APremium_Bond#U...
UK Lottery illegal in the USA
A friend who is a UK citizen resident in the USA tried to buy UK Premium Bonds but was told by NS&I,
"The US Postal Service Law Department has told us it is an offence against their Lottery laws to use the mail service for Premium Bond correspondence. This includes Premium Bond prizes.
They have asked us not to break their laws and we have to respect that request as far as we can. Due to this law I regret to inform you that you can not invest into, or hold, NS&I Premium Bonds from the United States of America.
Even if you gave us a receiving address outside the USA, it would not be a solution because we would still need your signature for a prize win."
All my correspondence with NS&I, winning notifications, everything is done online via email. If I win a prize it's sent via BACS to my UK bank account. Surely it can't be in breach of US postal laws if nothing is sent through the post? If I were to win big I'd be on a plane back to the UK to collect.
Actually as I'm typing I've just seen that NS&I have updated their guidance and maybe I'm OK...
http://nsandi-adviser.com/resources/useful-informa...
Premium Bonds
A client living outside the UK should check whether local regulations permit them to hold Premium Bonds. For example, the US has strict gaming laws which MAY mean it isn’t possible or practical to hold Premium Bonds while living there. Where Bonds are permitted, your client will need to apply by post, then register for our online and phone service to manage their holding. Your client will need to have a UK bank account that can receive BACS transfers, and any prizes they win will be paid in Sterling.
What happened with you Viper_Larry?
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