British Expats

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-   -   Dual taxes?? (https://britishexpats.com/forum/usa-57/dual-taxes-760044/)

AngieJMac May 30th 2012 3:12 am

Dual taxes??
 
Hello!
I am a British citizen and I have just got my 10 year Green Card. I have been been living in Texas since 2008. I have yet to find work and have been supported by my Husband.
When I do find work, how do I pay my taxes to the UK? Is the amount I have to pay the IRS the same as I would have to pay the UK (depending on the conversion rate at the time?) Do I have to earn a certain amount before I have to pay?

I also may have to return to the UK in a month or so for a few months for family reasons. If I get a job there for a few months, how do I pay my USA taxes? I have read that even though you can leave the USA for less than 12 months, you can be questioned on your return and possibly have your Green Card taken off you and denied re-entry! If I do go back I will only be leaving for about 3-6 months, and this will be a one off situation and the next time I return to the UK it will only be for 2 weeks at a time for a holiday.

I want to make sure I have everything in order before I leave, even though I am worrying myself sick over it!!
Thank you for reading :-)

Jerseygirl May 30th 2012 3:26 am

Re: Duel taxes??
 

Originally Posted by AngieJMac (Post 10090027)
Hello!
I am a British citizen and I have just got my 10 year Green Card. I have been been living in Texas since 2008. I have yet to find work and have been supported by my Husband.
When I do find work, how do I pay my taxes to the UK? Is the amount I have to pay the IRS the same as I would have to pay the UK (depending on the conversion rate at the time?) Do I have to earn a certain amount before I have to pay?

I also may have to return to the UK in a month or so for a few months for family reasons. If I get a job there for a few months, how do I pay my USA taxes? I have read that even though you can leave the USA for less than 12 months, you can be questioned on your return and possibly have your Green Card taken off you and denied re-entry! If I do go back I will only be leaving for about 3-6 months, and this will be a one off situation and the next time I return to the UK it will only be for 2 weeks at a time for a holiday.

I want to make sure I have everything in order before I leave, even though I am worrying myself sick over it!!
Thank you for reading :-)


Hi Angie...welcome to BE. :)

I'm moving your thread over to our US forums...hopefully the regulars who post in that forum will be able to answer your questions.

Bob May 30th 2012 3:27 am

Re: Duel taxes??
 
The UK doesn't tax on world wide income, so if you don't have any UK earnings, you don't have anything to worry about.

As for US taxes, you have to declare worldwide income and also assets over $10K in value. Whether you have any tax due depends on your situation.

Moving back to the UK to get a job is probably not a good idea, unless it is something short term that you got from the US to send you abroad, because you are supposed to show you are a permanent US resident, not a part time resident.

There are plenty of threads on this though, so worth a search and possibly a consult with a US immigration lawyer before you do anything.

AngieJMac May 30th 2012 3:42 am

Re: Dual taxes??
 
Thank you so much. I had a feeling going back to the UK and getting a job was a bad idea, even for the short term. I'll have a look at the other threads :-)

rpjs May 30th 2012 11:08 am

Re: Dual taxes??
 

Originally Posted by AngieJMac (Post 10090059)
Thank you so much. I had a feeling going back to the UK and getting a job was a bad idea, even for the short term. I'll have a look at the other threads :-)

You should look into filing a form P-85 with HMRC. This officially notifies them that you've left the UK and you'll probably get a refund of overpaid tax from them.

nun May 30th 2012 11:43 am

Re: Dual taxes??
 

Originally Posted by AngieJMac (Post 10090027)
Hello!
I am a British citizen and I have just got my 10 year Green Card. I have been been living in Texas since 2008. I have yet to find work and have been supported by my Husband.
When I do find work, how do I pay my taxes to the UK? Is the amount I have to pay the IRS the same as I would have to pay the UK (depending on the conversion rate at the time?) Do I have to earn a certain amount before I have to pay?

I also may have to return to the UK in a month or so for a few months for family reasons. If I get a job there for a few months, how do I pay my USA taxes? I have read that even though you can leave the USA for less than 12 months, you can be questioned on your return and possibly have your Green Card taken off you and denied re-entry! If I do go back I will only be leaving for about 3-6 months, and this will be a one off situation and the next time I return to the UK it will only be for 2 weeks at a time for a holiday.

I want to make sure I have everything in order before I leave, even though I am worrying myself sick over it!!
Thank you for reading :-)

First off don't worry.

Your Greencard, marriage and address show that you are US resident and NOT UK resident. Therefore, there will be no tax due to the UK on any income and gains you have outside of the UK. Things will get a bit more complex if you have any UK based bank or investment accounts though.

When you find work in the US your employer will withhold tax from your paycheck and then you will have to file a US 1040. You should already be filing jointly with your husband even if you have no income yourself.

If you have to go back to the UK for a few months working in the UK would complicate your taxes, but not very much. The UK would withhold taxes through PAYE and you could exclude up to $95k from your US taxes using the foreign earned income exclusion. Also as long as you maintain a US residence address and have strong family ties to the US and extended visit to the UK for family reasons will not endanger your US residency.

AngieJMac May 30th 2012 3:26 pm

Re: Dual taxes??
 
Thank you so much! I feel so much more calm about the situation. This will teach me not to assume anything again in the future and to always research before making any big decisions.
Thank you again :-)

Steve_ May 31st 2012 11:06 pm

Re: Dual taxes??
 

Originally Posted by AngieJMac (Post 10090027)
When I do find work, how do I pay my taxes to the UK? Is the amount I have to pay the IRS the same as I would have to pay the UK (depending on the conversion rate at the time?) Do I have to earn a certain amount before I have to pay?

You should have filed an HMRC P85 when you left. If you didn't, file one now and explain to HMRC it should have been filed on the date that you left.


I also may have to return to the UK in a month or so for a few months for family reasons. If I get a job there for a few months, how do I pay my USA taxes? I have read that even though you can leave the USA for less than 12 months, you can be questioned on your return and possibly have your Green Card taken off you and denied re-entry! If I do go back I will only be leaving for about 3-6 months, and this will be a one off situation and the next time I return to the UK it will only be for 2 weeks at a time for a holiday.
It's entirely okay to do what you're doing, the only real problem is that you have to be in the US 183 days a year to accumulate time towards filing for citizenship. But it won't affect your LPR status.

Basically if you work in the UK but your principal residence is in the US, you pay tax in both countries on that income (it will be withheld in the UK through PAYE presumably) and you file a 1116 with your US tax return at tax time to claim a foreign tax credit, to reduce the amount of US tax you pay.

Make sure the UK employer is aware you are non-resident for tax purposes and tells HMRC, otherwise HMRC will assume you have returned to stay.

Steve_ May 31st 2012 11:09 pm

Re: Dual taxes??
 

Originally Posted by nun (Post 10090569)
The UK would withhold taxes through PAYE and you could exclude up to $95k from your US taxes using the foreign earned income exclusion.

This isn't accurate, she's not becoming non-resident for tax purposes, if she were, that could cause a problem with her LPR status. The foreign earned income exclusion isn't relevant in this situation.

She simply files for a foreign tax credit with her US tax return. It's a pretty bog standard thing to do.

nun Jun 1st 2012 12:53 am

Re: Dual taxes??
 

Originally Posted by Steve_ (Post 10093793)
This isn't accurate, she's not becoming non-resident for tax purposes, if she were, that could cause a problem with her LPR status. The foreign earned income exclusion isn't relevant in this situation.

She simply files for a foreign tax credit with her US tax return. It's a pretty bog standard thing to do.

Yes you are right, she wouldn't be a bona fide foreign resident so no FEIE. The FTC is the way to go.


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