Harry31

Hi,

Great forum!

Need some help regarding a domicile issue. basically my i94 states that i can stay in the US till August 2010. I entered the country from the UK on 2nd August 2009.

The HR department has infomred me that i will have to return before 183 days otherwise i will become domicile US and have to pay double tax.

I dont understand why?? Or whether they even know. I'm employeed out of the UK office and being paid in pounds. I'm only working from the US office to attend meetings and carry out business on the same time zone. Can any one who may know or have experiance this clarify? From my knowledge my domicile status would only be an issue tax wise if i was employed on a US contract and paid ind dollars.

Any help will be appreciated
Thanks in advance

meauxna

The term is 'resident for tax purposes'. The IRS (tax agency) taxes based on US residency (time in the US vs immigration status).

I'm going to move your thread to the USA forum where more people who have info will see it.

Harry31

Thanks - would the IRS consider me as a resident for tax purposes even though i'm employed out of London?

meauxna

Yes, it's based on your body being in the US. Was just chatting w/your partner on the other thread about it, but we'll try to keep it all in this one. I'll go find you a linky.

edit, you're going to wish you never heard of the IRS... it's nothing like what you're used to.

Topic 851 - Resident and Non–Resident Aliens

Since resident and nonresident aliens are taxed differently, it is important for you to determine your status. You are considered a nonresident alien for any period that you are neither a United States citizen nor a United States resident alien.

You are considered a resident alien if you met one of two tests for the calendar year.

Substantial Presence Test


You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:

1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
* All the days you were present in the current year, and
* 1/3 of the days you were present in the first year before the current year, and
* 1/6 of the days you were present in the second year before the current year.


This might work in your favor

Foreign Earned Income Exclusion - Bona Fide Residence Test


You meet the bona fide residence test if you are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. You can use the bona fide residence test to qualify for the exclusions and the deduction only if you are either:

* A U.S. citizen, or
* A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect.

You do not automatically acquire bona fide resident status merely by living in a foreign country or countries for 1 year.


You are also now married to a US citizen and you may plan on staying in the US and applying for Permanent Residence. These are two important details that may influence your tax choice, travel choice and immigration path choice.
Welcome to the big leagues.

Harry31

Thanks for the reply. I appreciate your help and knowledge