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Moved to USA in mid November - Tax?

Moved to USA in mid November - Tax?

Old Dec 16th 2010, 1:37 am
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Default Moved to USA in mid November - Tax?

I've done a lot of searching on this forum, it seems to support something that seems more positive and counter intuitive than I thought.

Worked in the UK ( as a UK citizen) for last 10 years then moved to the USA in Mid November, I started immediately in our US office.

It seems I can claim for some tax back in the UK using the P85 form.

It seems that in the USA, I will be paid about 5k USD in expenses for moving, and then my salary for the rest of 2010 will be about 16k over my 6 weeks from Mid November until end of December.

In theory that means I will pay very small amounts of tax on that entire 21k income too- as a salary of 21k only draws about 4k in tax?

Is that really right? Seems to good to be true

I have researched- and it seems right.
Thanks,
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Old Dec 16th 2010, 3:39 am
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Default Re: Moved to USA in mid November - Tax?

Status, dates and location help, as depending on where you are, you've got Federal, State and possibly county and city taxes and don't forget that there are deductions, relocation can also be deducted depending on what the money was spent on.

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Old Dec 16th 2010, 1:04 pm
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Default Re: Moved to USA in mid November - Tax?

Originally Posted by Newbie1001 View Post
I've done a lot of searching on this forum, it seems to support something that seems more positive and counter intuitive than I thought.

Worked in the UK ( as a UK citizen) for last 10 years then moved to the USA in Mid November, I started immediately in our US office.

It seems I can claim for some tax back in the UK using the P85 form.

It seems that in the USA, I will be paid about 5k USD in expenses for moving, and then my salary for the rest of 2010 will be about 16k over my 6 weeks from Mid November until end of December.

In theory that means I will pay very small amounts of tax on that entire 21k income too- as a salary of 21k only draws about 4k in tax?

Is that really right? Seems to good to be true

I have researched- and it seems right.
Thanks,
I think you can check your US tax numbers for free online using TurboTax.

http://turbotax.intuit.com/personal-...ee-edition.jsp
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Old Dec 16th 2010, 1:19 pm
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Default Re: Moved to USA in mid November - Tax?

The first step is to work out your status for US tax purposes - "nonresident", "resident" or optionally "dual-status". There are different tax rates and rules if you are "nonresident". This tax status is a different thing from your immigration status.

IRS Publication 519 is a comprehensive guide to tax for foreigners (or "aliens" as they like to call us!). Might be worth a read.
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Old Dec 16th 2010, 3:07 pm
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Default Re: Moved to USA in mid November - Tax?

Thanks for all the help so far.
Just to be sure I answer all the questions and maybe more.
Here from the UK on a L1A Visa.
Work and live in Los Angeles, CA.

Relocation expenses were the termination fee on leaving my UK rental early, flights to the US and some hotel and cars for the first 2 weeks.

For tax purposes, non resident.
Married to a European wife, but shes waiting for EAD.
I make 136k USD per year,

Really appreciate any help.
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Old Dec 16th 2010, 6:40 pm
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Default Re: Moved to USA in mid November - Tax?

Originally Posted by david1980 View Post

Relocation expenses were the termination fee on leaving my UK rental early, flights to the US and some hotel and cars for the first 2 weeks.
If you've got receipts, most of that should be deductible, but you'll want an accountant to double check everything, but as a L1 you should have had one of those chucked into the contract at least for the first and last year in the US.
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Old Dec 17th 2010, 6:12 pm
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Default Re: Moved to USA in mid November - Tax?

Originally Posted by Newbie1001 View Post
moved to the USA in Mid November
Look up 'substantial presence test'. I moved to the US in mid-November also (two years ago) and I didn't pass the test, so didn't have to file.

It could be something that only applies to LPRs, I don't remember, but it might be worth looking up.
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Old Dec 17th 2010, 6:14 pm
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Default Re: Moved to USA in mid November - Tax?

Thanks but I don't pass- I am a non resident for Tax purposes, but that does not mean I don't have to file as far as I am aware.

As it stands, they already took 45% of my salary for Tax for my first 2 week pay period as they paid me for 6 weeks and expenses. - So I'll need to claim it back somehow.
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Old Dec 17th 2010, 6:40 pm
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Default Re: Moved to USA in mid November - Tax?

Originally Posted by Newbie1001 View Post
Thanks but I don't pass- I am a non resident for Tax purposes, but that does not mean I don't have to file as far as I am aware.

As it stands, they already took 45% of my salary for Tax for my first 2 week pay period as they paid me for 6 weeks and expenses. - So I'll need to claim it back somehow.
You need to file and you will get a refund. Withholding is calculated as if you were making your monthly pay for the full year. You will likely be paying about $1,500 in FICA tax, about $300 federal income tax (less if you can deduct moving expenses and possibly a refund of more than you had withheld due to "Make Work Pay" tax credit), plus state income tax.

Since you will be filing as a non resident alien, your federal income tax will only be calculated on your US income but your California income tax rate is based on your worldwide income but only taxed on the portion earned in California.

Last edited by Michael; Dec 17th 2010 at 6:43 pm.
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Old Dec 18th 2010, 12:35 am
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Default Re: Moved to USA in mid November - Tax?

It might be worth running the figures as "resident" - I can't now remember why, but arriving in October (so a "nonresident" for that year) it worked out better for me to file as "dual status" so that I was treated as "resident" for the part of the year I was in the US. I think it was because that way, I could claim an exemption for my wife - which reduces taxable income by $3650.

To file as "dual status" for 2010, you need to pass the "substantial presence" test for 2011, which would not happen until the middle of the year. So you would need to file for an extension then file the tax return in the middle of the year. You would need an ITIN (tax ID number) for your wife (unless she has an EAD and SSN by that time) which is applied for at the time you file your return. You'd need to file paper returns.

So unfortunately it would take a while to get your refund the first year. After the first year, it's much easier to file online.
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