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Help with tax treaty expiration and payment of back taxes

Help with tax treaty expiration and payment of back taxes

Old Mar 11th 2019, 10:25 pm
  #1  
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Default Help with tax treaty expiration and payment of back taxes

Hi

I am a UK citizen working as a postdoc on a J-1 visa. I arrived in March 2017, and I have been claiming exemption from federal income tax based on the US-UK tax treaty for the last two years. This tax treaty is due to expire in a few weeks, and after that I will be required to retroactively pay back all federal tax I would otherwise have paid in the 2017 and 2018 tax years. I am about to file my taxes for 2018 and I have no idea how to repay this tax, how much this will cost or if there will be penalties or interest owed on the back tax. There is very little information on this topic online, and it seems to be beyond most tax help advisers or software. Although I've seen this question come up once or twice on this forum, I still couldn't really get a clear idea about exactly what to do. If I file my taxes for 2018 with no mention of the tax treaty, I'll get hit with a big penalty for having $0 witheld from my paychecks all year. I'm guessing that amending the 2017 tax return to cancel the tax treaty will cause an even bigger penalty, with 2 years worth of accumulated interest. I really wish I hadn't claimed the treaty at all, but as my initial J-1 visa was just valid for just 12 months, followed by a renewal for another 12 months, I didn't know for sure that I would be staying here this long.

Has anyone been in this situation? How did you repay the tax, and what penalties did you have to pay?

Thanks
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Old Mar 12th 2019, 12:23 am
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Default Re: Help with tax treaty expiration and payment of back taxes

I feel this question was asked recently...no time to search just now..
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