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First US tax return - please help!
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 :rolleyes:
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! |
Re: First US tax return - please help!
Originally Posted by 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 :rolleyes:
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! |
Re: First US tax return - please help!
Originally Posted by TruBrit
yep but they are in houston..
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Re: First US tax return - please help!
Originally Posted by import
Well me too (sort of) so actually that would be perfect :)
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 |
Re: First US tax return - please help!
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.
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Re: First US tax return - please help!
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. |
Re: First US tax return - please help!
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. |
Re: First US tax return - please help!
Originally Posted by 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. 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. |
Re: First US tax return - please help!
Originally Posted by 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. 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. |
Re: First US tax return - please help!
Originally Posted by 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. 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. |
Re: First US tax return - please help!
Originally Posted by 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. I'll check this out myself but seeing as you're here... :) |
Re: First US tax return - please help!
Originally Posted by 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... :) |
Re: First US tax return - please help!
Originally Posted by 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... :) 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. |
Re: First US tax return - please help!
Originally Posted by dbj1000
Oh FFS! :D
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. 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. |
Re: First US tax return - please help!
Originally Posted by 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. |
Re: First US tax return - please help!
Originally Posted by 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. |
Re: First US tax return - please help!
Originally Posted by Bradford Lass
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.
I have no doubt that DBJ knows his stuff but it appears that as a resident alien that you should be taxed as a US citizen, substantitve presence test or not. I'm still searching to find out wtf the SPT actually applies to, as right now I can't find any examples, but I'll post back when I do. |
Re: First US tax return - please help!
Originally Posted by BigDavyG
OK - discount the rest of this thread.
I have no doubt that DBJ knows his stuff but it appears that as a resident alien that you should be taxed as a US citizen, substantitve presence test or not. I'm still searching to find out wtf the SPT actually applies to, as right now I can't find any examples, but I'll post back when I do. |
Re: First US tax return - please help!
Originally Posted by AdobePinon
From 519: "You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during the calendar year. (However, see Dual-Status Aliens, later.) This is known as the “green card†test. "
So what about the substantial presence test - presumably that's for H-visa holders, etc who are not permanent residents. By the way, despite possibly sounding clueless above I sat and passed the Association of taxation Technicians exams back home a few years ago when I was bored for a few months :o Maybe I was being lazy asking the questions on here but the link to the IRS site has prompted me to get of my arse, so thanks :) |
Re: First US tax return - please help!
Originally Posted by BigDavyG
Indeedy - that's how the article I was looking at seemed to read to me, though it didn't say that explicitly.
So what about the substantial presence test - presumably that's for H-visa holders, etc who are not permanent residents. By the way, despite possibly sounding clueless above I sat and passed the Association of taxation Technicians exams back home a few years ago when I was bored for a few months :o Maybe I was being lazy asking the questions on here but the link to the IRS site has prompted me to get of my arse, so thanks :) |
Re: First US tax return - please help!
Originally Posted by AdobePinon
From 519: "You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during the calendar year. (However, see Dual-Status Aliens, later.) This is known as the “green card†test. "
I need to check up on my relocation expenses as I did not relocate with a job already secured, so I'm not sure if they can be claimed back as job-related expenditure. Oh, one last thing - I didn't keep receipts for a lot of stuff when I first got here (airfares over here, a few hundred bucks lost at the racetrack whilst I was waiting to start my job, etc) - what's the procedure for claiming when you have no receipts so essentially no proof on incurring the expense ??? Is there even a bit of leeway they will give you ?? |
Re: First US tax return - please help!
Originally Posted by BigDavyG
Any other helpful hints, like deductions I could claim that aren't immediately obvious.
I need to check up on my relocation expenses as I did not relocate with a job already secured, so I'm not sure if they can be claimed back as job-related expenditure. Oh, one last thing - I didn't keep receipts for a lot of stuff when I first got here (airfares over here, a few hundred bucks lost at the racetrack whilst I was waiting to start my job, etc) - what's the procedure for claiming when you have no receipts so essentially no proof on incurring the expense ??? Is there even a bit of leeway they will give you ?? |
Re: First US tax return - please help!
Originally Posted by BigDavyG
Indeedy - that's how the article I was looking at seemed to read to me, though it didn't say that explicitly.
So what about the substantial presence test - presumably that's for H-visa holders, etc who are not permanent residents. By the way, despite possibly sounding clueless above I sat and passed the Association of taxation Technicians exams back home a few years ago when I was bored for a few months :o Maybe I was being lazy asking the questions on here but the link to the IRS site has prompted me to get of my arse, so thanks :) I'll have a think about what other non-obvious exclusions you may want to claim, but I can't think of any for now. I'm not sure about the receipts question, so that's one for the H&R Block robot. He/she should at least know the answer to an easy one like that :) |
Re: First US tax return - please help!
Originally Posted by 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... :) You should have moved in June instead of July, that extra month changes alot with your taxes. If you moved after 6 months into the year I think you do have to claim all your UK income, but the tax year in the UK is considered as well... or at least it used to be, and any taxes taken in the UK are either deductible or prorated unless you're claiming a return there... most people don't realize they can get all their UK taxes back if they move here,... but you can. Might be worth looking into. I know more about this shit than I ever wanted to.... causes alot of headaches the first year. Kate |
Re: First US tax return - please help!
Originally Posted by Patrick Hasler
You should have moved in June instead of July, that extra month changes alot with your taxes. If you moved after 6 months into the year I think you do have to claim all your UK income, but the tax year in the UK is considered as well... or at least it used to be, and any taxes taken in the UK are either deductible or prorated unless you're claiming a return there... most people don't realize they can get all their UK taxes back if they move here,... but you can. Might be worth looking into. I know more about this shit than I ever wanted to.... causes alot of headaches the first year.
Kate |
Re: First US tax return - please help!
I used Global Tax network for the first 2 years, they were excellent and very knowledgable on international tax legislation.
This year I done my own as it was straight forward. |
Re: First US tax return - please help!
Originally Posted by cbone
I used Global Tax network for the first 2 years, they were excellent and very knowledgable on international tax legislation.
This year I done my own as it was straight forward. |
Re: First US tax return - please help!
Originally Posted by Patrick Hasler
You should have moved in June instead of July, that extra month changes alot with your taxes. If you moved after 6 months into the year I think you do have to claim all your UK income, but the tax year in the UK is considered as well... or at least it used to be, and any taxes taken in the UK are either deductible or prorated unless you're claiming a return there... most people don't realize they can get all their UK taxes back if they move here,... but you can. Might be worth looking into. I know more about this shit than I ever wanted to.... causes alot of headaches the first year.
Kate Get all your UK taxes back? I think not! You can get a refund if you have overpaid - which you usually will because of the distribution of your personal allowance - but if you earned it in the UK - you are gonna pay for it in the UK...... |
Re: First US tax return - please help!
Originally Posted by dbj1000
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.
It gets tricky if you claimed your UK tax back for not being a resident... |
Re: First US tax return - please help!
Originally Posted by Big D
Get all your UK taxes back? I think not! You can get a refund if you have overpaid - which you usually will because of the distribution of your personal allowance - but if you earned it in the UK - you are gonna pay for it in the UK......
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Re: First US tax return - please help!
Originally Posted by Bob
It's $80K.
It gets tricky if you claimed your UK tax back for not being a resident... Can they find out or can I just play dumb ?? (I only earned a few £k before I left) |
Re: First US tax return - please help!
Originally Posted by Bob
You can actually, if you ain't been a resident for a whole tax year you can claim it back, I did before I left....does make it interesting for US taxes though because then you have to claim it over here...but I didn't make the threshold so it didn't matter :D
i stand corrected! bugger :mad: |
Re: First US tax return - please help!
Originally Posted by BigDavyG
I did.
Can they find out or can I just play dumb ?? (I only earned a few £k before I left) |
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