raceman

Hi all,
just a question for future reference really. Once I have achieved PR status, is it essential to file for taxes jointly?

I only ask as I have UK income, and it looks as if it could get quite complex with that, and adding student loans for my good lady into the mix and it may make life considerably easier to file seperately. Would that put us at a huge disadvantage?

I assume we just need to keep every other piece of paper work we ever get for the next 2 years lol.

Thanks in advance

Noorah101

No. The only requirement, if you are married, is to file in the married category. It could be married filing separately, or married filing jointly, whichever way works in your favor financially.

Rene

RICH

Agree with Rene. I will say, depending on your own income, given you are not working a whole year in US, it might be best to do joint. I got screwed by not realising this my first year. (You can get double allowance for effectively one income).

raceman

Ah ok cool.

I haven't gone into this to far as yet, but at what point does one become liable for US taxes? I know it's going to start getting complex when it comes to this and my UK income, as i lose all my allowances in the UK when i become non resident, but i believe i get to claim them on the tax i will have paid in the UK from the IRS...

RICH

I am no expert.
I don't think you lose you allowance in UK, at least for the current tax year.
You do not become liable to pay US tax, you become liable to file a tax return, and once you are PR (or Citizen? not sure), you may be taxed on worldwide income.
Unless the amounts are many $100k's I do not think it is a major concern.

raceman

aha ok cool, god this is SO complicated lol. Me thinks me needs an accountant (at first at least :-) )

jeffreyhy

When you become a PR. Or, when you begin earning income in the USA as a resident alien (which could happen if you obtain your PR status via adjustment of status).

Regards, JEff

jeffreyhy

Not many, something approaching one.

Regards, JEff

raceman

Thanks for that Jeff. If all goes to what looks like being the timescale, should get PR status mid December ish, but won't start job till mid Jan. So I would then be liable for US tax mid December, and become non UK resident at the time?

Noorah101

If you are inside the USA for more than 180 days in any given calendar year, you become liable to file a US tax return; OR

If you obtain such a status in the USA which warrants filing a tax return (i.e., earning US income); OR

If you become a US PR at any given time in a calendar year, you can see if you meet IRS substantial presence test.

Usually, it benefits you tax-wise to file jointly if married. That is all I know. So if you were married and become a US PR in December 2012, you are allowed to file a joint tax return (or at least your USC wife will file a joint tax return, so she can claim you on it).

I'm moving this thread to the General USA forum since it deals more with taxes than immigration.

Get in touch with BE member Peter Newton...he's a tax consultant who deals with folks in exactly your situation.

Rene

Noorah101

US PRs and USCs are both liable to file a US tax return every year, and report worldwide income.

Rene

raceman

That's what i thought Noorah.

I believe I will be a few days short of the substantive test for 2012, notwthstanding gaining PR in December, hence I believe i will become US tax liable Jan 2013 I think, given that i won't have worked in US until at LEAST Jan.

I think i have all that right, dam i hate complex offcialdom.... lol

raceman

PS how do i get in touch with Pete Newton?

Noorah101

Send him a Private Message on here.

Rene

nun

+1.

I would file married separately if you only have a year or so where you might have a UK tax liability. Once you only have a US liability go ahead and file jointly.

If you have a continuing UK tax liability because of UK sourced income you will probably need some professional help.

There are things you should do when you leave the UK for the US

File a P85 with HMRC so they will know you are non longer a UK resident.

Find out about paying voluntary NI while you are in the US. If you can apply to pay Class 2 as it's inexpensive and will count towards you UK state pension.

Do a UK financial spring cleaning.

Sell any stocks and shares ISAs and UK unit trusts as these are taxed under the US PFIC rules that are complex and draconian.

Make sure you understand the US tax status of any UK pensions you have.

Make sure you understand the US rules about offshore accounts ie FBAR and 8938.

Welcome to the USA and the IRS.............y