Charlie0809

Hello,

My husband & I are relocating to Edgewood in October from Dubai. I wondered if anyone could recommend a good tax lawyer/give us some advice.

There is no income tax in Dubai and I wondered if we would have to pay tax on our annual earnings if we arrived in the US part way through the year (as you would have to do in the UK)

Also, when does the tax year run from? Some websites say Jan - Dec and some Oct - Sept.

Many thanks in advance

Pulaski

For individuals, the tax year is the calendar year. The Federal government's tax year is October to September, and FWIW, most states use July to June.

Vicious B

Hi there, i'm going through the same thing...I spoke to this woman, who was able to advise on US Taxation from/ to Dubai...hope she can assist

Renate T. Tanaka, www.expatustax.com

Charlie0809

Thanks I was actually going to PM you as I thought you might be able to help me. Missing Dubai?

I'll give her a call. If we have to pay, we won't be moving until January

chuckles67

I moved from Singapore to California in late 2009. I didn't pay federal tax on prior earnings, but I did have to pay California state tax for Singapore earnings pro-rata (e.g.: arriving 1st October, pay state tax on 3/12 of the year earnings made prior in Singapore). The tax advice I received did not cover this point

Bluegrass Lass

As Pulaski stated, the US tax year is Jan to Dec. So you would file your 2014 in 2015.

So if you work in Dubai from January to June, then move to the US, then when you file your Federal Taxes (and most likely your state taxes) you will need to include the income you earned in Dubai from January to June. Whether or not you would actually have to pay US taxes on those earnings will probably require you to consult a tax expert.

hungryhorace

This is slightly incorrect. My 2013 tax return prepared by an accountant didn't include my UK income before I relocated to the US. If I had filed married jointly (and therefore been compelled to declare my UK earnings until I relocated) our tax bill would have been thousands of dollars.

You do _not_ have to declare the income earned in Dubai if you file as married filing separately on your dual status tax return (which can't be filed electronically FYI).

In your first year, you should hire an accountant to handle your taxes for you. You'll struggle if you don't.

Bluegrass Lass

Yes, but aren't you married to a US cit? I don't know if the same situation would apply when both immigrants are non-USCs.And wouldn't that also depend on how number of days you were in the US (I can't remember what that test is called)? If you spent the majority of the year outside the US, I would think you could do what you did because (I think?) you would be considered a non-resident alien (or some such term as that). But let's say you moved to the US in April, so the majority of the year is spent in the US, I think you would be considered resident for the year, and therefore have to claim worldwide income.

However, I am far from a tax expert so who knows.

hungryhorace

I am married to a USC, correct. I spent over 2/3 of the year in the US in 2013. I was considered a 'resident alien', and I completed a dual status tax return as appropriate. Said tax return only included my income since entering the United States. You would only need to declare your worldwide FY2013 income if you are filing 'married jointly'.

Incorrect. You only need to declare worldwide income if you are filing married jointly. I filed married filing separate, hence no reason to declare worldwide income.

md95065

There are several factors that will affect what the OP has to declare for the 2014 tax year.

Assuming that neither the OP or her husband are US citizens and that they will be on non-immigrant visas when they arrive in the US and that they have not spent enough time in the US over the past 3 years to meet the IRS "substantial presence test" for 2014 (all of which is very likely the case, but none of which was specifically mentioned) ...

... then they should be able to file as non-residents for 2014 and only declare and pay taxes on whatever income they actually receive after they enter the US.

http://www.irs.gov/Individuals/Inter...esident-Aliens

State tax rules may be different.

Bob

Big difference being, UK has tax treaty and taxes paid, DXB does not.

hungryhorace

That's when you use foreign credits though I believe? You wouldn't need to include any income earned before relocating, not unless you wished to file jointly if it worked out better for you to do so. My return for 2013 doesn't list my earnings outside of the US before I relocated.

My accountant ran the numbers both ways (married separate and married joint - where ALL my income in 2013 was declared) and I would have owed thousands filing jointly, so I filed married filing separately

JAJ

If you are non-resident, then in general only U.S. source income is taxable and sometimes even then, it's subject to withholding tax rather than taxed through a tax return.

If resident, then worldwide income must be declared.
If, in a given year, someone becomes either resident or non-resident, that is then a dual status year and the year is "split" between the two different periods.

One of the important tax planning points, often overlooked, is that it is normally a good idea to realize capital gains before becoming U.S. tax resident. Strongly recommended to calculated what capital gains exist as of now, based on U.S. dollars, and consider taking any unrealized gains. Obviously, if any other country's tax system is involved, this also has to be taken into account but if resident in a country without capital gains tax then it may not be a concern. There may be some residual U.K. capital gains tax issues if absent less than 5 years.

Orangepants

Yes this was the tax advice I received from KPMG. We married in October and I entered in Dec from the Cayman Islands and he filed married filing separate. There is no way I would have entered the US in Dec if I knew I had to pay tax on 11 months tax free earnings. Also made them pay me the yr end bonus in November - 4 months earlier so I wouldn't have to be concerned about that