import

Hi, does anyone have any recommendations on finding a good tax professional who doesn't cost the earth and understands UK and US tax laws or at least that they are different
This is our first year in the US and we have to file a dual-status tax return, also we received all kinds of income from UK sources during the year (due to bad financial planning on our part ) . I am starting to seriously question our accountants ability to handle this mess, especially since we are on green cards and I read that tax fraud can cause it to be revoked. Not that I have any intention of comitting tax fraud, I am just scared of making a mistake which could be construed as such. It is costing us enough as it is having to declare all this income...
Also does anyone know if following the advice you get from the IRS helplines would count as a defense if a mistake was made? I have been noting down names and numbers but don't know if it's really worth it.
As you can tell I am seriously freaked out :scared: Any advice welcomed!

TruBrit

yep but they are in houston..

import

Well me too (sort of) so actually that would be perfect

TruBrit

hiya, ok I'll pm you his contact number or maybe I have his email address.... I'll check it out...he has filed for us for yrs...my hubby is a usc and me a trubrit ttfn

Patrick Hasler

For your first return here, since you have income to claim from the UK, you're going to need an accountant. It can get complicated and they can help you deduct more than you think you should be able to. It might be worth the investment first time around.

dbj1000

I've recommended Global Tax Network before, but never used them myself. They were recommended by someone on this board, and they seem great. They'll interview you over the phone, then you fill in a detailed interview online and they'll prepare your tax return. They're also pretty reasonably priced - my complex first year return would have cost around $175, but I didn't feel confident working with a CPA purely on the phone and online. I should have done, as it would have been far less trouble than H&R Block.

Alternatively, look at this thread for my saga of using H&R Block Premium. If you learn your tax rights pretty well, and just want a company to sign your return and defend it if the IRS audit you then H&R Block Premium just about fit the bill, but only as a last resort.

I still think Global Tax Network are a great idea though, and regret not using them my first year here when I had similarly complex overseas income issues.

BigDavyG

Seeing as this thread is up a quick question.
Am i liable to pay any tax in the US on any income i earned in the UK during 2005 BEFORE I got here.
I already claimed a rebate from the Inland Revenue just after I left the UK.

Up to now I've been working on the assumption that I just have 5 months US tax to pay full stop - i have no rental or other UK incomes right now.

dbj1000

Like all things tax-related, it's not that simple.

If you're resident in the US for tax purposes (look up "substantial presence test" on the IRS website) then you're liable for US tax on your WORLDWIDE income.

However, there's a foreign earned tax exclusion which covers up to $70k, I believe, and because the US has a tax treaty with the UK you shouldn't actually be double taxed on anything.

The key point is whether you're resident for tax purposes. You'd better hope you are though - the alternative is that you file as non-resident, and are not allowed any of the tax exemptions that a resident is allowed.

If you had UK income and you're not completely at ease with working out your tax situation from the excellent (no, really!) IRS website then you need a good CPA.

BigDavyG

Cheers Db
Against your good advice I'm booked in with H&R Block premium on Saturday as I had expected this to be a doddle - maybe not now but I get H&R dirt cheap through work so it won't cost me too much to at least listen to them.
Before I go I'll check out the IRS site to get an idea of how the land lies myself.

dbj1000

OK. Checklist for the moron you deal with at H&R Block Premium:

1) Do you meet the substantial presence test? If so, your taxes are to be prepared as if you're a Yank. Don't listen to any crap to the contrary.
2) Foreign Earned Income Exclusion. This is what a US resident would file for if they had worked abroad for part of the year and paid taxes to the nation in which they worked if that nation had a tax treaty with the UK. You should be able to exclude >$70k of any income you had in the UK during the tax year.
3) Mortgage interest, Council Tax (property tax), childcare and other exclusions. Since you're filing as a resident, you can exclude the same things you could exclude here. If you paid Council Tax then you may be able to exclude it as Property Tax or as Foreign Tax (separate exclusion). Same for mortgage interest. Do NOT let the H&R Blockhead tell you that these things can't be excluded - they can, and I did, and if in doubt get them to research on the IRS website.
4) Relocation costs. You can't exclude much of these, but remember to exclude what you can. IRS has good details on what can and can't be excluded.

I had a bitch of a time with this the first year, and H&R Block were nearly $8000 off in their initial rebate calculation, so if in doubt, take your time and check their calculations against the IRS website instructions.

PM me if you need any additional info. Remember, if they get it wrong then it's free, and they have to correct it, and they still have to defend it to the IRS if necessary, so it's not the end of the world.

BigDavyG

A quick question then - is my tax calculated on the whole tax year even though I was only resident since July ??
I'll check this out myself but seeing as you're here...

AdobePinon

Yes, which means that if you can exclude most of your UK income you won't have much tax to pay this time round.

dbj1000

Oh FFS!

Only if you meet the Substantial Presence Test.

Do you? If you do, then your tax is calculated on the entire year, including any UK income. If you don't then... but I think you do.

BigDavyG

Interesting - I arrived on July 14th so do not meet the test (183 days in the past 3 years).
So I'm f**ked then, it that correct - I will have to read into this a bit more, but I fear that I may well get a bit p**sed off if what you've posted above proves to be correct.

Jaxbar

I spoke to IRS who I'm sure said that I counted as a resident and could file jointly with OH, i arrived in Oct 05 and did not work here. I too am now totally confused.