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Paying US Tax

Paying US Tax

Old Mar 23rd 2021, 10:16 am
  #1  
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Default Paying US Tax

Hi Everyone,

I've had my spousal visa approved, passport received along with the mysterious envelope flights are booked for April 6th and we're excited especially my wife who's going home!
My company want to keep me on a contractor basis through to the end of August, they'll be paying me gross in USD into a US bank account, my question is how do I go about paying the tax due on this, I'll be putting aside an amount each month so I don't get a nasty surprise but can I pay on account like we do in the UK or do I need to wait until the tax return season at the end of the year?

You hear stories of the IRS and the last thing I want is to fall foul of them at the first hurdle.
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Old Mar 23rd 2021, 11:28 am
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Default Re: Paying US Tax

https://www.irs.gov/payments/pay-as-...ed-tax-penalty

You of course cannot start making payments until you have an SSN.
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Old Mar 23rd 2021, 1:54 pm
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Default Re: Paying US Tax

And further to civilservant's post, you will pay the quarterly estimateds to your state (presuming it has a state income tax), as well as the IRS. Save your receipts, because as a self-employed individual you can write off business expenses -- especially if you set up a dedicated office area in your home.
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Old Mar 23rd 2021, 3:21 pm
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Default Re: Paying US Tax

Originally Posted by Nutmegger View Post
And further to civilservant's post, you will pay the quarterly estimateds to your state (presuming it has a state income tax), as well as the IRS. Save your receipts, because as a self-employed individual you can write off business expenses -- especially if you set up a dedicated office area in your home.
Key being dedicated. Definitely one for the IRS auditors.
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Old Mar 23rd 2021, 3:40 pm
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Default Re: Paying US Tax

You are required to make your tax payments quarterly. Normally if you fail to pay 90% of whatever your final taxes are throughout the year then you have to pay a penalty on whatever the underpayment is. The penalty is interest charged on the underpaid amount. It varies with the IRS interest rate but was about 3.5% in 2020. Therefore you estimate what your final taxes will be and pay on a quarterly basis as you go. The penalty is waived if you paid 100% (or more) of the required taxes in the prior year, or if you paid 90% of the taxes due in the current year, and also for a few other circumstances. One of other circumstances is reasonable cause which I am sure you would qualify for. In any case make your estimated payments as soon as you get your SSN and you should be fine. You open account with the iRS and pay online, you can also check your balance. https://www.irs.gov/payments
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Old Mar 23rd 2021, 7:13 pm
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Default Re: Paying US Tax

Thanks guys for all your help on that, really appreciate it that's cleared a lot up for me.
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Old Mar 23rd 2021, 8:06 pm
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Default Re: Paying US Tax

If you are both working and filling married you will need to use some sort of an online calculator to see what you will owe after deductions. Make sure to factor in that you will have to pay both the employer and employee related SS and Medicaid as self employed (similar to NI in the UK).
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