UK + US tax issues: “Foreign earned income exclusion” etc.
Hello, I have a green card through marriage, but currently working in the UK on a contract for a couple of years. I heard that I don’t have to file US tax return as a “non-resident”, which would be bad when it comes to renewing my green card. I’ve spoken to an accountant who specialises in this area (US + UK tax issues), and they quoted me about $700 to do the paperwork – for federal and state tax returns plus a foreign bank account report. Does $700 sound reasonable? It’s a significant proportion of my income, and usually I pay an accountant around $100.
Thanks in advance for any thoughts or advice on this. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
For $100 you're paying a tax preparer, and $700 sounds reasonable to me for the services of a professional accountant.
Depending on how much a bite out of your British income the $700 takes, you might consider just lumping it in with your US income, taking a deduction for tax withheld in the UK, and paying any extra tax. I.e. would the incremental tax be less than $700? |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by RTowns
(Post 13162162)
Hello, I have a green card through marriage, but currently working in the UK on a contract for a couple of years. I heard that I don’t have to file US tax return as a “non-resident”, which would be bad when it comes to renewing my green card. I’ve spoken to an accountant who specialises in this area (US + UK tax issues), and they quoted me about $700 to do the paperwork – for federal and state tax returns plus a foreign bank account report. Does $700 sound reasonable? It’s a significant proportion of my income, and usually I pay an accountant around $100.
Thanks in advance for any thoughts or advice on this. 700 sounds reasonable for a professional accountant if they are familiar with US.UK tax issues.You might get a for a bit less- but the cost of errors can be substantial. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by morpeth
(Post 13162184)
A green card holder by definition has to file a resident return , let alone other requirements to keep or renew a green card.
700 sounds reasonable for a professional accountant if they are familiar with US.UK tax issues.You might get a for a bit less- but the cost of errors can be substantial. On the 1040 the OP will state his foreign address as this is where he is resident and that is important for other things, but as you say, as a Green Card holder he will be taxed as if he was resident. Depending on the State he may also be subject to State taxes since some States such as California and Louisiana will apply State taxes on income from a company registered in that State. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
On a side note, did you apply for a re-entry permit to protect your status?
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Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by Expatrian
(Post 13162388)
On a side note, did you apply for a re-entry permit to protect your status?
Another person I knew applied and got re-entry permit, but then had issue trying for a second one. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by morpeth
(Post 13162446)
Or consider visiting US every six months ? I know a person who went through similar scenario. Lawyer said don't worry about visiting states every six months- and that was first thing immigration asked later on seeking to renew Green Card.
Another person I knew applied and got re-entry permit, but then had issue trying for a second one. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by Expatrian
(Post 13162594)
That might work in conjunction with filing a US tax return, which as a “US Person” (Green card holder or USC) he is required to do. But I’d be looking to follow the rules to avoid jeopardizing a green card. The US just doesn’t seem to like even US citizens living outside the US, although a citizen can do so indefinitely without loosing citizenship. The expectation when someone naturalizes is he/she “intends to reside in the United States,” stated on the naturalization certificate, but in practice I doubt it’s ever enforced.
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Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Thanks for all these helpful comments. I looked through the comments in December, then life got hectic, so I'm late to actual responding. Will reply to a few details one by one.
By the way I'm thinking about getting a quote from a second accountant. Any recommendations? Thanks. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by durham_lad
(Post 13162271)
$700 also seems reasonable to me.
On the 1040 the OP will state his foreign address as this is where he is resident and that is important for other things, but as you say, as a Green Card holder he will be taxed as if he was resident. Depending on the State he may also be subject to State taxes since some States such as California and Louisiana will apply State taxes on income from a company registered in that State. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by Expatrian
(Post 13162388)
On a side note, did you applt for a re-entry permit to protect your status?
|
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by morpeth
(Post 13162446)
Or consider visiting US every six months ? I know a person who went through similar scenario. Lawyer said don't worry about visiting states every six months- and that was first thing immigration asked later on seeking to renew Green Card.
Another person I knew applied and got re-entry permit, but then had issue trying for a second one. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by Expatrian
(Post 13162594)
But I’d be looking to follow the rules to avoid jeopardizing a green card.
|
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by RTowns
(Post 13168258)
Hi, thanks for this. It's NJ. However I'm not sure I understand your point about state taxes and a company registered in that state?
I receive a non-qualified pension from the Louisiana company I used to work for. I moved to Texas when I retired in 2010 and have been in England since 2016 but still have to pay State taxes every year on that income, paying as a non-resident of Louisiana. California has the same rules. Some States can be impossible to escape from. Texas is fine. No idea about NJ. |
Re: UK + US tax issues: “Foreign earned income exclusion” etc.
Originally Posted by RTowns
(Post 13168262)
Hi. You mean the lawyer said don't worry, so the person did not return every six months? And what did immigration ask exactly? If they had been back every six months? I'm confused as I would think they would not look on someone routinely returning every six months very favourably. I was also wondering about the second re-entry permit that I would need and sought advice from a lawyer. Also, my green card will expire while I am still here. It's all a headache.
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