Aaarrrggg

I'm feeling really invigorated, thanks guys!

I've talked to a letting company and we're going to aim to start renting in Jan. If the visa doesn't go through by then we can always stay with friends or rent somewhere temp in the UK. I had somewhat of an epiphany last night realizing its really going to happen... thank you so much!

Question; how do they define "annual income" for the form? Is that last years income, the average for 3yrs, 5yrs...10?!

Noorah101

No, it's not last years or an average of past years. It's current income. It's what you are earning today, at this moment, times 2080 (the number of hours an employee works full-time per year).

Rene

Aaarrrggg

Hmmm, that makes things tricky. Investments can rise and fall, I have an online store which varies and I'm freelance. For the last 4yrs I have earned comfortably more than the min income requirement but I have no definable daily income.

meauxna

In the US, your business income is different from your personal income, even when self-employed.
Be careful how you divvy up what; make sure you can evidence what your personal income is.

Noorah101

Yes, that does make it tricky. Are you sure your own individual income qualifies you? You can't include the entire income from the business, you can only include the profit from the business as your own personal income. i.e., total business income minus business deductions, then what's leftover is what USCIS considers as your own personal income from the business.

I don't know how to predict the dividends part of it.

Rene

Aaarrrggg

I believe so, but I could be misunderstanding. I'm going by my annual taxable income... is that right?

Noorah101

I don't have a tax return in front of me to see where that final figure is listed....but basically it's your business income, minus any business expenses, equals YOUR bottom line income.

If you're going to use business income on the I-864, it will probably be helpful to show a profit & loss statement, so they can clearly see the profit (which would be considered your personal income from the business).

Rene

meauxna

I don't know, I've never done a self-employed tax return for the UK.

Here's a US style example (remember our tax reporting/collecting is very, very different).
Let's say I do what you do, I've got an online store and some clients on the side who I do .. graphics for.
I do the work, I bill my clients (or collect from my store) and add up the money, deposit it every month.
Then I have expenses for generating that income. Many of those expenses can be deducted as a cost of doing business. Then I get into the 'real' write offs; my home office expense can be deducted, vehicle use etc etc
This is great for me immediately, because every expense is knocking my taxable income down. If I get enough of them, I pay hardly any income tax.

Unfortunately, it also looks like I don't 'make' any money. MY taxable income might not have any bearing on the money in my pocket (IE it would be less) which *I* know, but the people I need to prove my income to (like lenders or USCIS/DOS) just see my personal income as very low.

Helps?

Noorah101

Another example is my husband, who is self-employed, sole proprietor of his business. He has clients who he repairs rugs for. The client pays him, and he earns let's say $30,000 a year from that work.

But he also has business expenses...tools, travel, phone, utilities, workshop rent, etc. Of course the more business expenses he has, the more they can be deducted on the tax return, which means he pays less tax at the end of the year (which is good for him).

But, if he gets $30,000 a year from his clients in income, and he has $25,000 a year in business expenses (which he claims in his tax return), then his net personal income is only $5,000. It's that $5,000 which USCIS allows as income when you're self-employed or using business income on the I-864.

Rene

Aaarrrggg

Funny I am a graphics person... how did you know (was it my keen sense of numbers and form fillinginness?) *jk*

So taxable income is the one they'll be looking at; that's my income minus any tax deductions. If that's over the min requirements they'll be happy? I can provide them tax returns for the last 4yrs to prove it and my work is all online so it won't stop when I move.

Do investments count as business or personal? Blurgh sorry, I know I'm a bit of an oddball case.

jeffreyhy

Use the most recent value that you can document as of the date that you prepare and submit the I-864. Something like the most recent monthly or quarterly statement.

jeffreyhy

A,

You're going to have to estimate your current annual income based on how things are going right now as compared to how things have been in the past.

You know what your business income and expenses have been in past years, and how those items have varied seasonally (if they do vary seasonally). How are those things running this year? Are you ahed or behind? Based on how things have been going this year, or this quarter, where do you estimate that you might wind up at the end of the year?

You will have to show your calculations, keep them simple enough that an uninformed 3rd party (which is what a consular officer is) can understand with minimal explanation. Make assumptions that make you estimate look good, but reasonable assumptions. (e.g. if using the last quarter rather than the last 6 months for comparison works to you advantage, then use the last quarter.)

Regards, JEff

Aaarrrggg

Ok I think I can do that. I'll pull together all the paperwork I can about my income and use it to figure out this years best guess. It's actually going better this year, and once we get to the states we'll have so many more opportunities for work.

I talked to my accountant (my Dad ) and he said:

"I’m not sure whether it matters but ‘Taxable Income’ in the UK is different to the States. In the UK there is very little that you can deduct from your income to work out your tax; in the States there is a lot more. The best way I can think to explain the difference is that, here, you’re business income is taxed on your profit – i.e. income less, very strictly, the particular business expenses – and it’s really only for business income that this rule applies. Other income generally has no expenses that you are allowed to deduct. In the States the principal of deducting expenses is much broader and is applied to all income (has something to do with the same income not being taxed twice!)

All this means that your ‘taxable income’ in the UK is your gross income (having added back any tax deducted before you get your money) from all sources less any business expenses. The only normal deduction from this figure would be if you are making a contribution to a pension fund."

I thought it might be handy info for anyone else interested in UK/US tax differences.

jeffreyhy

A,

Opportunities for work in the USA do not count. Existing work that will continue after relocating to the USA count.

Why are you introducing the word "taxable" with respect to income? Non-taxable income is still income and can apply to I-864.

Do not confuse business income with personal income, taxable or not. If a person derives their income from their own business, unless it's an incorporated business then:
personal income = business income - business expenses.

Simple as that. If you want personal income to look bigger then you are free to treat some business expenses as personal expenses if you wish. Just be aware that you can't keep two sets of books, one for the IRS and the other for immigration - if you tell the IRS (or your own taxing authority) that something is a business expense, thus reducing your personal income, then you must tell immigration that same personal income.

Regards, JEff