moving to L.A. - some questions
 

It looks like my wife and I will be moving to LA in about 8 weeks. Just waiting on the job offer from a US company. Not a huge business, but a privately run firm. I was wondering what conditions or extras I should be asking for in my contract regarding reloaction costs and work visa arranging.

I am also trying to work out some costs and (from reading the board) car insurance seems pretty expensive. Also, what is the best way to go about buying 2 cars?

Can I buy transformers to run my UK electrical goods (I was really thinking about all my hi-fi seperates - typical man).

Also, my wife is pregnant (due in November), so I'd appreciate any tips on this as well. Don't know what I will be offerred in terms of health plans, obviously would love her to be covered too, but this is not guaranteed.

Any other pitfalls to look out for? I am renting out our house in UK, how does that affect US tax?

Much appreciated.

We are running our stereo off a transformer and it works fine.

Re your wife being pregnant, make sure you are going to be covered by insurance for this, and check what your deductible is. If you don't have insurance you could easily be up for a bill of $10,000+ and that's assuming there aren't any problems.

Any rent you receive for your house in the UK will have to be declared as income in the US. They tax on worldwide income.

Be aware that the visa may take longer than anticipated. I am moving to the SF Bay Area - so we (self, wife, 18 month old rugrat) are applying for L1/L2 visas. My company has immigration lawyers on the case - they took 5 weeks to prepare my papers, sent them to me, then (at the start of this week - 16th June) I called the US Embassy in London to arrange an interview, fondly imagining that it would be in the next 2 or 3 weeks.

Well - our interview is 29th July!:mad:

According to the US Embassy website, the earliest we can expect to have our passports back, with visas, is 5 working days later (yeah, right!) - 5th August. If they're a bit slow, or they decide that 'background checks' are needed, it could be up to 2 months!

We can't book movers until we have our visas, and they want 2 weeks notice, so we're looking at the movers coming 19th August at the earliest - IF WE'RE LUCKY!!!

Moral of the story :lecture: - it'll all take longer than you expect, and keep on everyone's case to make sure they're doing what they should be.

Good luck!

Pat

Pat

Am shocked to hear that about the delay for the visa interview. We have a friend who is applying and the stupid lawyers haven't done the paperwork yet, and he is expecting to be in the US by the 25th July. Also we are about to go for our renewals and still waiting to find out if we need interview. This is going to be a real pain.

That sounds like a scam. What if London charges him tax on those earnings as well? What if his rental income doesn't come to the US, but goes to a management company in London, who then uses it to pay his mortgage. Would that type of arrangement get him out of redundant taxes?

What interests me about this discussion is I might want to leave my home in the US and travel to Europe. Will I still be taxed in the US? Europe? Both?

And what is the deal with income tax in general? Someone told me that by working abroad, you get out of paying taxes in both your home country and your host country. I don't believe it. Anyone know? My biggest fear would be to pay taxes on the same earnings multiple times, especially if I can only use the benefits in one country at a time. How can I avoid that?

Definitely not a scam at all.

US taxes on worldwide income, so if you are a US citizen working abroad I believe you still have to file in the US. Working abroad does not exempt you from taxes anywhere. For example my understanding is if you are US citizen working and living in the UK, your wages will be subject to UK tax. You still do a US return, but as the US/UK have a tax treaty you can claim as a credit for taxes paid in the UK.

BTW you can thank Mr Bush for recently signing into law the bill on dividends tax which effectively screwed US citizens living and working overseas.

Taxes can not be avoided, best thing you can do is to consult a tax specialist to minimise your situation if you are going overseas. If anyone tells you by going abroad to work you won't have to pay taxes suggest that they might want to put it in writing that they will share your cell at San Quentin when the IRS catches you.

Wait.. what about Vanuatu, and other "tax havens"? The whole purpose of establishing an international trade company in Vanuatu is that you get out of taxes that would be paid anywhere else by declaring your earnings in Vanuatu. Supposedly Vanuatu taxes are so low (if anything) that it's insignificant. I'm sure the US, being the bully that it is, would have put in place some way to attempt to collect the lions share; but tax freedom seems to be reality.. or Sharmen Networks (makers of Kazaa) wouldn't have their enterprize in Vanuatu. Some of their income even comes from the US.. most of the advertising revenue comes from the US.

Suggest you take the advice of a qualified US tax accountant rather than rely on advice from myself or scammers on the internet. Think there has been a bit of to-do recently about Vanuatu and it's tax free status. All I can say is remember that there is no such thing as a free lunch in this world. If you are a US citizen you are deemed to have a responsibility to the US taxwise unless you are prepared to give up your citizenship. Why don't you peruse the IRS website and that will give you some idea of what they expect.

Re: moving to L.A. - some questions
 

DVD Overseas has a good range at good prices - you'll need a type of transformer known as a "voltage stablilizer" for your hifi, and be sure to get one with excess capacity to cope with the power peaks. I got a 2KW smoothing transformer for my hifi and it runs, and sounds, as good as it did in the UK.

BTW I sent you a PM, did you get it?

Tax, in the US, and the UK, is only payable on "profits", which means that you take gross income, in this case "rent", and deduct interest costs, in this case on the mortgage, as well as the costs of repairs, management fees, insurance etc. to calculate taxable net profit.

You'll prepare tax returns in both countries, but in most cases the tax that you pay "at source" (to the country where you live and work) will be allowable against US taxes. In any case the US doesn't charge taxes on it's overseas citizens until your income reaches around $76,000 (or is it $78,000? I can't remember now).

Sometimes it's true - but only if you live in a country that doesn't have income taxes, and the only ones I know of are in the Middle East. The US is the only country that I know of that makes it's overseas citizens file tax returns, so if for example a British citizen went to work in say, Saudi Arabia, then they would have no taxes to pay. This is never true for a US citizen. :(

See above, (i) unless you have a very good salary Uncle Sam doesn't try to levy taxes and (ii) you can usually credit overseas taxes,against US taxes if there are any due.

Questions? :D

Different rules apply to corporations. Unless you can incorporate yourself there is no way that this will work for US citizens. :p