Now US Tax Resident - reduction in US tax or rebate of UK tax?
Feb 28th 2018, 9:59 pm
#16
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Thread Starter
Joined: Mar 2016
Posts: 119
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
You are really making me feel awesome here! 
I'll get onto a tax lawyer ASAP guys, thank you.
I'll update when I now more.
I'll get onto a tax lawyer ASAP guys, thank you.
I'll update when I now more.
Mar 1st 2018, 12:37 am
#17
Grumpy Know-it-all
Joined: Jul 2010
Location: Calgary, Alberta
Posts: 8,928
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
You didn't mention your status, if you're L-1, there's effectively an 183 day grace period because you could be working in either country as an intracompany transferee. Forget about the substantial presence test, it's not really relevant, Article 4 of the tax treaty is how it's actually calculated and that talks about where you principally reside which is always a bit fluid at the start.
You effectively file dual-status for 2017, which is explained in IRS publication 519. In essence it means a pro-rated tax return for the period beginning when you established residency, which is to some degree up to you. As long as you switched over to the US payroll within six months of arrival it shouldn't be much of a problem.
If you came over on an immigrant visa then you're tax resident from day 1.
You effectively file dual-status for 2017, which is explained in IRS publication 519. In essence it means a pro-rated tax return for the period beginning when you established residency, which is to some degree up to you. As long as you switched over to the US payroll within six months of arrival it shouldn't be much of a problem.
If you came over on an immigrant visa then you're tax resident from day 1.
Mar 1st 2018, 1:45 am
#18
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Joined: Mar 2016
Posts: 119
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
You didn't mention your status, if you're L-1, there's effectively an 183 day grace period because you could be working in either country as an intracompany transferee. Forget about the substantial presence test, it's not really relevant, Article 4 of the tax treaty is how it's actually calculated and that talks about where you principally reside which is always a bit fluid at the start.
You effectively file dual-status for 2017, which is explained in IRS publication 519. In essence it means a pro-rated tax return for the period beginning when you established residency, which is to some degree up to you. As long as you switched over to the US payroll within six months of arrival it shouldn't be much of a problem.
If you came over on an immigrant visa then you're tax resident from day 1.
You effectively file dual-status for 2017, which is explained in IRS publication 519. In essence it means a pro-rated tax return for the period beginning when you established residency, which is to some degree up to you. As long as you switched over to the US payroll within six months of arrival it shouldn't be much of a problem.
If you came over on an immigrant visa then you're tax resident from day 1.
It was an L-1 visa, correct.
It sounds like I need to talk to a tax attorney ASAP.
I’m close to that 183 days from when I first entered the US on the L-1 (although I was going back and forth before that meeting suppliers, etc so I was counting those days), so I need to get the company to switch my payroll over now.
Mar 1st 2018, 3:45 pm
#19
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Joined: Feb 2010
Location: Temecula, CA
Posts: 4,759
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
You're focusing on one issue and missing the big issue. He still has taxes to deal with beyond this.
Mar 1st 2018, 4:03 pm
#20
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,446
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
.... And in any case I didn't miss your issue - I addressed in post #9, above. 
One of his issues has the potential for small penalties because of late payment of taxes, the other issue, if not handled properly, has the potential to lead to penalties of tens of thousands of dollars and even a custodial sentence.
I will leave it to you to decide which of us is addressing the "big issue".
Last edited by Pulaski; Mar 1st 2018 at 4:06 pm.
Mar 2nd 2018, 1:47 am
#21
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Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
I'm going home! 
Mar 2nd 2018, 3:17 am
#24
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,446
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
But don't try to play games with the IRS.
Mar 2nd 2018, 2:47 pm
#25
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Joined: Apr 2001
Posts: 46,388
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
Where is the issue of late tax payment? He did not have to file in the US for 2016 as he was not working in the US. He arrived in 2017 and should file by April 15, 2018 his US 2017 tax return. So where is the possible late tax payment/return?
For instance, hubby moved to the US on August 23, 1998, we married on September 26, 1998. He worked in Canada for 6-1/2 months in 1997, as well as having his Canadian military pension as income. His Canadian accountant filed his 1997 taxes in Canada in 1998 and he completed the IRS paperwork and chose to be counted as a resident for tax purposes in the US for 1997. His tax payment in Canada was included in our IRS tax return for 1997 (pro rated) and it was used as an offset of tax liability due on a joint return. This was done by a US tax accountant. There was no fraud. I don't see this case as being any different with the exemption of marriage to a USC.
For instance, hubby moved to the US on August 23, 1998, we married on September 26, 1998. He worked in Canada for 6-1/2 months in 1997, as well as having his Canadian military pension as income. His Canadian accountant filed his 1997 taxes in Canada in 1998 and he completed the IRS paperwork and chose to be counted as a resident for tax purposes in the US for 1997. His tax payment in Canada was included in our IRS tax return for 1997 (pro rated) and it was used as an offset of tax liability due on a joint return. This was done by a US tax accountant. There was no fraud. I don't see this case as being any different with the exemption of marriage to a USC.
Last edited by Rete; Mar 2nd 2018 at 2:49 pm.
Mar 2nd 2018, 2:56 pm
#26
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,446
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
* Filing for an extension, of six months, would be a good idea if he needs to file a return for 2017 but can't get it completed by April 15.
Last edited by Pulaski; Mar 2nd 2018 at 3:06 pm.
Mar 2nd 2018, 3:03 pm
#27
Concierge
Joined: Apr 2001
Posts: 46,388
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
Well we are going to be late filing because F**king Canada's social old age pension services won't change the mailing address and the USPS has returned the T-4 statement back to Canada. No T-4, no way to file. Ask me if I give a damn. I don't.
Mar 2nd 2018, 4:35 pm
#29
Concierge
Joined: Apr 2001
Posts: 46,388
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
Why? Yes, I have always filed my tax return on time for over 54 years. If it's late, doesn't bother me. Just had an audit for 2015 and it was nice to tell IRS to stuff it that they were wrong. Just received their letter that the matter has been resolved and we owe them nothing. Dimwits
Mar 2nd 2018, 4:57 pm
#30
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,965
Re: Now US Tax Resident - reduction in US tax or rebate of UK tax?
