First month in the US
 

I am glad I came across this forum, it gives so much information in human language. Hopefully somebody is clever and kind enough to help me with my questions.
Four years ago my husband passed away and I lived in Scotland on widows of police officer pension since. This money let me live quite comfortable in the UK. I do pay couple of ponds a month tax on it.
I have my children settled in the US and after a while I decide I could not stand silence in the house and all sorts of things you get after your happy life suddenly ended any more.
I have arrived here on 1st November on immigrant visa from the UK on family reunion grounds. I have received my SSN and waiting for GC. I live with my daughter and her partner in Virginia. I won't be working at all for this year in the USA. I am 60, so I am not sure I can find a suitable job even later on.
I started to read about taxes and health care and after month of reading I don't get anywhere. Maybe because I am not so clever and English is not my mother tongue?
Can anyone help me with some questions?

1. Should I file my income for this tax year? (I am here November and December, GC hasn't arrived yet).
I have a house and some savings more then $10k in the UK.
I have read some topics and it seems I don't have to file my tax return 2016.

2. How I define myself (I only understood I file as a single person)
Am I nonresident until I get GC? Then I become a resident?

3. Do I pay any income tax here if I get £11k a year pension only?

3. Is anything I should pay upfront?

4. Do I have to inform the UK taxman about my move? I think next tax year I won't pay any tax in the UK because tax free income allowance will completely cover my pension.

5. What is a best way to file: a calendar year or a fiscal year? Can I choose? It seems if I can file from April to March like in the UK it will be easier to count my income with one only document from the UK?


I have read Convention between US and UK especially the Article 17 and 18
https://www.treasury.gov/resource-ce...s/uktreaty.pdf
but it hasn't make things any more clear.

I really prefer my daughter move to The UK, but she won't.

I would appreciate any help.
Thank you

Re: First month in the US
 

The only thing I can answer is that for US taxes, you must file per calendar year (Jan - Dec). Tax return is due by Shortly 15th for the previous calendar year.

Rene

Re: First month in the US
 

due by April 15th

Re: First month in the US
 

Yes, sorry, typo.

Rene

Re: First month in the US
 

I suggest you file as a dual status resident for Federal purposes and a part-year resident for Virginia...but only if your income is above the filing threshold which it won't be...

Re: First month in the US
 

2) If your visa was based on an I-130 and I-485 application then you are already a permanent resident ( you were the moment you cleared immigration), receiving the actual green card has no additional significance for tax purposes, or in fact any other purposes either.

3) You don't pay any tax "up front", but I wonder what you have done about health insurance?

Re: First month in the US
 

You must inform HMRC using form P85 that you are no longer resident in the UK otherwise they will continue to tax you. I'm not sure the exact terms of the UK/US double taxation treaty but you may have to file the DTT individual form to HMRC .
do you rent out your UK house? If so then you will need to file a return to HMRC but I believe any tax you pay on the rent can be offset against any US tax due. If you leave any assets in the UK then the tax situation can become quite complex. I'm sure others with more knowledge will be along to offer advice.

Re: First month in the US
 

Thanks for this information, i didn't know that. My visa based on an I-130. So, do I have to file 2016 even I don't work here? How I said my annual income is £11k. It makes about $2400 for November and December. Because I wasn't a resident before November, I should count my annual income here as $2400. And because it is lower then allowance I don't need to file 2016? Am I right?

I am on travel insurance just now. I will be going back and forward for sometime. I don't rent out my house. I need to sell it but in place where I lived market is not good at all. It will take ages to sell.
It is very confusing. I wish I could find a good inexpensive accountant to do my first tax return. I heard from few people here some of them charging a lot but making a mess with filing.
Paying all the bills in Scotland and traveling every tree months don't make my life any easier.
I realise I have to pass this stage and things will change for better.

Re: First month in the US
 

Your police widows pension will be classed I believe as a government service pension, and as long as you are not a US citizen, under the UK/US tax treaty can only be taxed in the UK.

You may want for at least your first tax return to ask advice from a CPA. Mine had a very unique way of dealing with my police pension, until I became a dual UK/US citizen. I was never 100% sure he was correct so I'll not advocate that others do what he did, but I think it warrants getting advice.

Re: First month in the US
 

Thank you, I thought my pension should qualify under Article 19. I will try to find a good adviser to fil up my first tax return.
One thing I need to deside soon will I file 2016 (two months here) or not? I prefer not to, if I don't have to.
Thanks again, you made my day

Re: First month in the US
 

I would recommend that you look into getting a full US health insurance policy as travel insurance is only for emergency treatment while one is on vacation.

Should you require medical treatment "of the everyday kind", then you might find that your travel insurance won't cover it.

Re: First month in the US
 

I was thinking the same thing, and the insurer may also baulk at funding short-term care for something like a heart attack, so the OP could find themselves on the hook for medical bills of $250,000 in just a couple of weeks! :scaredhair:

As a separate issue, there may be a "tax" penalty for not having "Affordable Care Act" compliant health insurance - the size of the penalty is income dependant.

Re: First month in the US
 

If OP meets the bona fide resident test or the physical presence test from living in the UK (which she should) then the tax penalty should be waived for 2016.

Re: First month in the US
 

Thanks all for your advises. I realise I need to get US health insurance. I am going to look into it closely. At the moment I am resoanably healthy (I mean I don't take any medication or go to doctors on regular base). I probably need to sort it out sooner then later. Doctors in London gave me clearance to get into the US until 4th January. Just wondering is any money would be left for living after all.
It is quite scary to loose my independence even I have good children. But I can't see I can afford to survive here without their help.
The same time I am sure many people have far worse circumstances but they manage to survive.
So I have two choices: to lower my standart of living if I want to be with my children or go back to Scotland and be miserable (at list when nobody can see meí ½í¹„).

Re: First month in the US
 

Please take a deep breath. It is not all doom and gloom and while you need healthcare in the US, with assistance from a healthcare specialist you should be able to find something you can afford.

It is a difficult time in life for you having lost your husband of many years. Learning to live alone without being lonely is something many people never seem to learn t do.

Being in the US with your children and grandchildren can be wonderful for you if you all get along. You do need to sit down and figure out just how much money you will have to live on monthly from your husband's pension and one day from your retirement benefits from the UK.

Once you have determined your income then you need to sit down with your children and discuss how and where you are to live. They have been in the US for a while and should be able to help you with questions about apartments, areas to live (if you are not staying with one of your children) and what jobs, if any, you are or might be able to get. It might only be part time work in retail but it will bring a little extra money and will get you out of the house.

The people you need to talk with are not here on this forum which is populated in the majority by 20, 30 and 40 year olds. The people you need to talk to are your children.

Good luck to you.

Re: First month in the US
 

Did you not work out your finances and day to day living expenses before you moved to the US? (albeit still travelling back and forth to the UK by the sounds of it)

You say that you don't think you can survive without your daughter's help, but surely she and you were aware of this?

Is your only income your 11K GBP pension? If so, and with no certainty that you are going to be able to get a job, I would say that living on 14K USD at today's exchange rate is going to be extremely difficult.

Your medical insurance could be a couple of hundred dollars to start with and while you will be eligible for Medicare at 65 (having 5 years as permanent resident) you will still have to pay for Part A (around 400 bucks a month at present. It's hard to see how you can afford your own apartment on 14K a year.

I don't think you can afford to be flying back and forth to Scotland. You've also got to decide to either rent or sell the property in Scotland and cut out the costs.

Re: First month in the US
 

I don't think this is true at all ...... I get the impression that a great many of the regulars are in their 40s, 50s and 60s. :eek:

Re: First month in the US
 

Police pensions, along with teachers pensions, local government etc are as Ian says, classed as Government pensions and as such most DTTs EXCLUDE them from relief. For example, my wife receives a teachers pension and a state pension. both of these are excluded from the UK/Philippines DTT so she pays tax in the UK. I have state pension and SERPS plus two small private pensions. I get my private pensions paid gross under the DTT but HMRC tax my State pensions as they are above the tax free limit.Have a look here: INTM343040 - DT claims and applications - Types of income: Pensions and Annuities Here's the country listing - you'll need to scroll down to USA to see whats included. Unusually, the UK DOES allow State pensions to be paid tax free if you are registered with the IRS as a US tax payer.
https://www.gov.uk/government/upload...n_Treaties.pdf

hope this is of some use.;)

Re: First month in the US
 

Thank you for getting back to me. I appreciate it.
Well, I guess I did not do my homework properly but my daughter and I decided it will be better for all of us if I move here and we will live together.
I hope I will never regret it.
At list I can sleep now and not wondering will I wake up in the morning and when somebody will find me if I won't. It is quite common for my case.
I have decided to sale the property in Scotland but it takes time. Prices there have dropped quite dramatically since we bought this house 7 years ago. This is another quiestion: do I have to pay tax on money I'll get for the house if I loose money selling it?
Thanks again.

Re: First month in the US
 

I did not think I will get so many replays with very useful information. Thank you.

Re: First month in the US
 

I agree, there don't seem to be many people here much below 40 - some certainly, but I get the impression that the median age is around 50ish. :unsure:

Re: First month in the US
 

Because Sterling has fallen the loss in Sterling will be even larger, so apart from FBAR & 8938 reporting, no US tax payable. I don't understand how you can live without healthcare coverage...I wouldn't be able to sleep myself if I knew I could never get ill.

Re: First month in the US
 

Have you considered working at time ? If you UK pension tax-free in US, a part time job could be nice supplement. It is hard for many jobs if one is 60, age discrimination is a big factor in US, but there are many part time jobs in shops or in health/senior care that would be available and your "foreign accent" would actually be a benefit. I am not recommending it, but I know in my area I notice in some stores because of difficulty with younger staff some stores prefer older workers, I noticed a few older Brits or Aussies working part time and steady work in some stores.

Don't know if your immigration status precludes health care from Medicaid, but I think Obamacare/ACA may be an option, at least to cover catastrophic medical issues.

Re: First month in the US
 

Can you be added to your daughter's health insurance?

Re: First month in the US
 

That is highly unlikely - she'd have to be classified as a dependent for that to be possible, and as she has a house and pension income I don't believe she could be described as dependant.

Re: First month in the US
 

I thought generally to be classified as a dependent most places go by whether you claim the person on your tax return. If I recall there are some rules about what percentage of a persons expenses are covered to be classified as a dependent. I don't recall when listing dependents for medical insurance them requesting a tax return. Though I guess with a pension, and if living separately hard to justify being a dependant.

Re: First month in the US
 

Yeah, you're right, I'd forgotten that. I get the impression that you have to be providing most of the requirements for living for them to be claimable on your tax return - i.e. that without you they'd be close to destitute.

Re: First month in the US
 

sounds like the OP should be able to get on her daughter's plan then?

Re: First month in the US
 

:confused:

She's 60, owns a home, can travel internationally, and has a pension sufficient for her to "live quite comfortablely". I doubt she would meet the definition of being dependant unless at least three of those things change (and specifically including her income and housing) - so much older, no longer has (sufficient resources to pay for) housing, unable to go out on her own, and insufficient income to live on.

Re: First month in the US
 

I thought her income was $14k and she will be living with her daughter?

Re: First month in the US
 

$14k income and (only) 60 years old seems to be a long way short of being dependant - start thinking of care, support, and attention that a child requires and you'll be in the right ballpark.

Re: First month in the US
 

First a little slap on the wrist. Anyone moving across borders, and particularly if it involves the USA, should fully understand the health care, tax and financial implications to avoid potentially very nasty problems. Your immediate issues are taxes and healthcare. The taxes won't be too bad given your income sources, but healthcare could be a big issue. You will have to buy insurance or get on a relatives plan if you can. The premiums will probably be quite high given your age. I would look at getting on Medicaid in Virginia and look at the Government ACA plans available if you don't qualify for Medicaid. Longer term when you turn 65 you will be able to buy Medicare at the full premium, which is about $6000/year. How much have you budgeted fro healthcare costs?

I would file as a part year resident in the US and Virginia from the day you arrived in the US. You should also have files a P85 with HMRC to tell them you are lo longer a UK resident and file a UK self assessment (if necessary) for the time you were in the UK.

More that $10k in UK savings accounts means you must file an FBAR with the US Treasury. You will also have to pay US tax on interest on your savings accounts, but you can claim your UK personal allowance and tax relief using form R43. If you have not sold the house and are now US resident you will have to deal with capital gains in both the US and the UK if you sell and also tax on rental income in both places if you rent it out.

You might well fall below the income level required to file......however, I would still get your taxes done so you can see where you stand and the issues yiou have to deal with next year.

You are a US resident from the day you arrived if you came in sponsored by a relative on a green card.

That's a very open ended question. But if that money is from a UK Government pension and you are not a US citizen it will be taxed in the UK and NOT at the US federal level. You should check whether it is taxable by Virginia. Rental income, interest, capital gains will all be taxable in the US and if they are UK sourced then HMRC can also tax them and you will have to get credit in the UK for any US tax paid. However, your income might be low enough to avoid tax and there are ways to minimize the amount you pay......so some planning would be a good thing to do.

Yes tell HMRC about your move by filing a P85. Your UK personal allowance could well mean that you pay little to no tax in the UK (and on the US side of things too) so you need to file an R43 to claim your UK personal allowance as a non-resident.

The US and UK tax years do not coincide. It's a continuing issue to keep track of things, you just have to deal with it unless you are a small business and then you can file using a predefined fiscal year.

The treaty can be tricky and is actually only relevant is a few situations because US domestic law trumps it. If you are unsure of things write down your questions and get more help. Define your questions tightly and only as one at a time.

The most immediate issue for the OP is health insurance and its cost.

Re: First month in the US
 

Yes, you are right, I am living with my daughter. I won't be qualified as depended. To be honest I rather to pay more tax then to meet all the requirement to be qualified.
I will defenetely look for a part-time job. I am thinking about babysitting, I love children. I used to work at school long time ago (not in the UK, in case you are wondering how I manage to do that with my English).
I have to get my own Health Insurance. Surprisinly I sleep far better here without it then I did in Scotland knowing if I have a problem doctor will see me for free maybe in 3 months time but it is another matter.

Re: First month in the US
 

Oh my goodness! I am so grateful for the last post. It seems like things are getting more clear and my panic recedes. I will start to do a research about Medicaid.
I guess I deserved a little slap on the wrist. I was too excited about joining my children here. I am not sure what I could change, maybe only get reed of savings? I won't gain anything with sale of the house. Actually quite opposite I will loose.
I keep saying Thanks and I mean it.

Re: First month in the US
 

I don't think you deserve a slap on the wrist at all. family comes first.

I would recommend checking with CPA about dependent status, cant hurt.

Looking after children great idea, and many middle class families would love someone from Britain to babysit their children. Daycare can be quite expensive in America.

While I am not suggesting since not your own house, looking after say 3 children after school until parents get off work could easily be $700 to $1,200 per month depending on local situation.

Obamacare can be complicated to understand but even with pension income included could be affordable for catastrophic costs ( i.e. any hospital stay), though it is possible they say you make too little based on pension then they try to put you on Medicaid- which I am not sure as new resident you qualify for ( don't some visas state for 5 years no public benefits- I don't know answer). But Obamacare at least in state I was in, could base rate on projected income to "get in the door ". One of my children switched to Obamacare and quite happy with it, but each state very different,

Re: First month in the US
 

We must agree to disagree then. End of narrative.

I wish the OP well and that she can work things out. Apparently with a $14K annual income she might well be eligible for free Medicaid. I know that my neighbor isn't on her $17K social security benefits before deductions and that is before any adjustment to gross income. As per the agencies here in MS.

Re: First month in the US
 

Yes family comes first, but a little planning prior to the move would have lessened the OP's worries and avoided a dangerous period of being in the US without health insurance. I would not recommend that anyone go through the relative sponsored immigration process without financial and healthcare planning, that's just common sense.

Selling the house and researching healthcare would have been a good idea. In all this we are assuming the OP has "scrubbed" her finances so that there are no US issues like UK investments funds held in things like ISAs, but as she only mentions a savings account I assume that its not a problem.

I would advise her to apply asap to Virginia to get what benefits she can. She probably won't qualify for Medicaid....unless she is in some special category that gets her around the 5 year waiting period of green card holders....but her low income might get her a nice ACA subsidy and maybe some other benefits too. She needs to get healthcare asap.She should try to get some Medicare credits by working and paying FICA so that after 10 years she can get Medicare Part A at no charge.

Re: First month in the US
 

When on SS (if you don't take it early), health care is provided through Medicare.....if you have low income you can still qualify for certain Medicaid benefits.

Re: First month in the US
 

Isn't the cost of Medicare just deducted at source from the social security payment, as opposed to being "provided"?

Re: First month in the US
 

Yes, that is known. She is 69 so not early SS and has Medicare but cannot afford the copay on her meds. She borrows from us constantly it is draining on our finances as she continually injuries herself requires hospitalization. Right now she has a broken knee cap and without her meds she claims the pain is too bad to live with. The doctors won't do surgery until the swelling goes down and it won't go down because she lives alone and cannot afford outside help so must fend for herself. By the time she pays her mortgage, insurance, bills she is left with $300 a month for meds and food. She called about applying for Medicaid and was told she brings in too much. They did not take into account her mortgage, etc.

So she lives on the kindness of strangers.