Michael

There is approximately an $85,000 exemption plus foreign taxes paid may possibly be deducted from US taxes owed. Take the following statement as you like.

If your tax liability is zero there is no penalty for not filing, but you may risk eligibility for future exclusions or deductions by not filing a timely and accurate return.

http://www.usembassy.org.uk/irs/irsfaq.htm

Chorlton

I guess it depends on why you came to the US in the first place maybe? I'm just thinking aloud. I suppose that, time aside, there is no downside to gettting it done. I'd better get started!

Englishmum

That's exactly what I'm planning to do (if I have the perseverence to stick it out!). Although my husband and I are almost certainly going to retire in England - and our daughter lives there as well as all of our relatives, it's almost certain that our son is going to stay in the States - after all, he left the UK shortly after his sixth birthday.

My spouse is now on an expat posting in Singapore - where taxes are much lower than in the UK and USA - and will almost certainly give up his green card; his tax advisors say he would otherwise have to pay more than $50k per year to the IRS despite not living and working in the States!

I want to keep my green card going so if my son settles here for good and raises a family, I can come on extended visits instead of the usual 90 days that tourists get on the non-visa waiver. I'm planning to spend a few weeks at a time both in the US and Singapore (and stop half-way in the UK to see our daughter lol!). I think I need to be in the States for six months of each year so as not to jeapordise my green card status, but I don't think there is a definite rule..? (I dare not ask the USCIS guys whom I see at Newark airport every week when I'm working there and get a red flag against my name lol!

It's going to take a few more years before I can apply for US citizenship, but the way the housing market has gone into decline over here in the States there isn't much point in trying to sell the house right now in any case, so we may as well keep it on (although it's costing me a whopping $400 to have my windows cleaned today! I don't know why it costs so much to get windows cleaned in the States...?).

Some Aussie friends have just moved back home to Canberra but got their US citizenships before leaving, as an 'insurance' in case they can't settle back home.....but they wouldn't have done it if Australia had lower taxes than the States. My other Aussie friend has done exactly the same thing...but can't sell her house and is still stuck here.

Dave_Was

My understanding is that the Green card is for a permanent resident status in the US. That is, you must be looking and intending to permanently reside in the US.

I think that below 6months trips are okay, as this is just general travel. Trips over 6months then you need to start showing your strong links to the US, etc.

There's a lot of conflicting information out there. For example, I was told that you could leave for up to two years by getting a re-entry permit, but if you got a permenant job in the foreign country that could be construed as you permenantly residing somewhere else than the US.

Also I have read that multiple trips of 6months or so can raise a flag. You might want to get advice on this.

Marmalade

This is what worried me the most. I had planned to go home this summer, and had found a teaching job in Scotland, but was hearing a lot of conflicting advice about whether it would seem as if I had abandoned my permanent residency in the US seeing I would be gone for over six months. I was worrying myself silly about the thought of going home, working the school year, and then suddenly deciding I didn't want to be there after all (as we all know we don't know how we will feel until we are actually in the situation), then not being able to come back to the US to live permanently as before.

So, to play it safe, I am staying in the US for another year while I get my citizenship here. Then if I do go home and don't like it, I can always come back without the worry and hassle that I MAY run into if I had not obtained my US citizenship.

Maybe I would have been okay with the re-entry permit, but I for one did not want to take that chance

Englishmum

I'm not going to be outside the US for single trips of more than six months - just a few weeks at a time - and intend to spend at least six months per year in the USA; still have our house here as well as our son (aged 19) who needs a home here too!

Dave_Was

I think in that case, I think it does show you are a permenant resident of the US and only travelling. That's just my thoughts anyway.

Good luck.

englishinfl

Interesting question, do you mean the question to apply if you resided in the UK or the USA? One would have to be inclined to think that logically, if you are livng in the UK at the time and you file seperate tax return for yourself from the UK to here, instead of a joint one for both of you, the answer would be no. If you reside in the UK the husband has no need to declare any income at all to the US government if he's not a USC.
Now I'm sure someone will correct me for my assumption that the IRS would follow logic
I've been reading a lot here about the tax implications of dual UK/US citizenship, and it's something that's definately putting me off ever becoming a USC when I become eligible to apply for it in a few months time.

englishinfl

They'd send the CIA after you, who would then chop your hands off and freeze all your bank accounts and assets.

Just kidding.

snowbunny

The tax laws are complicated and ever changing. However, you might get best advice on UK-Yankee. I'm not sure if the USC has to file in the US as married filing separately (which ups your taxes considerably!) I do know it is as confusing as hell when mixed residencies and citizenships come into play.

Dave_Was

There is a lot to read and figure out.

What if you work for a company?
What if you form your own company?
What happens if you work and your spouse doesn't?
What happens if your spouse works and you don't?
What happens if you only one of you is a US citizen?
What happens if you give gifts?
What happens if you receive gifts?
What happens with inheritance?
What about estate planning?

I think that if I get to the point where I'm a year away from being able to apply for citizenship, I'll be doing some long reading and visting the accountant over this.

Just as an example, did you know that the rules for inheritance and gifts, between two spouses is different if only one is a US citizen, rather than both?

englishinfl

Well, actually I was responding to a particular question from the other poster, regarding their tax return question, for one with a US/UK dual, and one UK, but I admitted that I didn't know what was what. It was based on logic, and assuming that they were living in the UK, ( you'll probably have to read their post to get the full story )

Yes, you're absolutely right, there's a heck of a lot to read and take in, and to consider carefully before one jumps one way or the other. It seems like a lot of people think that getting dual UK/US citizenship is the answer to all their problems, whereas I'm not at all convinced that it is.

I HAVE thought about pretty well everything you mentioned in that list, and more besides. As I said previously, it really is something that dissuades me from ever wanting to get a USC, and especially not without looking into the whole subject of tax liabilities. What about exchange rates etc? Another loop in the system.

As far as it goes, no I have no idea what the rules are for an inheritance or gifts that are from the UK if one spouse is a USC and one a UK/US dual citizen with both living in the UK.

It's a potential minefield, even for a good accountant.

Dave_Was

Sorry if my post came across as a pop, really didn't mean it that way. In fact it was more of an agreement with your post, that you should really understand the implications of becoming a citizen, rather than just jumping into it, without understanding the ramifications.

On the question about the gifts between spouses and the difference between citizens and if only one is a citizen. I think I know the answer for that one and it was more just to point out the difference and how serious the implications can be.

For example, if both are citizens, I think that the US inheritance laws allow a complete transfer to the surviving spouse. If only one is a citizen, then it is taxed.

also gifts between US Citizen spouses are unlimited, between citizen and non US citizen spouses it's capped to a level and then tax is due after that.

Again I apologise for the way that the post came across.

TruBrit

you might be interesting in reading about QDOT provisions aka Qualified Domestic Trust if you haven't done so already......

http://halfwaytoconcord.com/estate-p...alien-spouses/

Dave_Was

All seems very complex. I suppose the simplest thing to do is to first make sure that there is an equal distribution of wealth between the two spouses and use that 100,000 allowance each year if needed.

I'll leave it here as I don't want to hijack the original thread.