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RayAme's Discussion of Taxes & Insurance for New Immigrant

RayAme's Discussion of Taxes & Insurance for New Immigrant

Old May 25th 2013, 9:52 pm
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Default RayAme's Discussion of Taxes & Insurance for New Immigrant

There are a couple of things you might want to look into.

First once you become a legal permanent resident, you will likely need to file US tax returns. Once you got married, your wife has to file as either "married filing jointly" or "married filing separately" and can no longer file as "single". If filing as "married filing jointly", her taxes should be significantly less than previously when filing "single" but if filing as "married filing separately" her taxes will be more then when previously filing as "single". Although you are required to file a US tax return if making above a certain amount overseas, normally there isn't any US tax to pay either because of the "foreign earned income exclusion" and/or "foreign tax credits" and when filing, you can file jointly with your wife reducing her taxes. Currently you are not a legal permanent resident and normally can't file a joint tax return for 2013 unless you become a legal permanent resident this year which means that your wife would normally pay higher taxes for 2013 since she would file "married filing separately" but you can be treated as a resident for tax purposes by filing an IRS form even though you are not a legal permanent resident allowing her to file "married filing jointly" allowing for possibly lower taxes. US tax law is very complicated.

Secondly, at you age it will be difficult and/or expensive to get health insurance. Although health care reform starts in 2014 making it easy to get health insurance, it can still be pretty expensive depending on your combined income and age. Your wife may have employer provided health insurance and you can possibly be placed on that policy. You'll need to determine how to best take care of your medical needs.

At age 65, I believe that you will be able to piggyback on your wife's work history and be eligible for Medicare as if you had worked in the US for at least 40 quarters with no extra charge. Medicare Part A covers hospitalization and is free, Part B is outpatient care and currently costs about $100 per month, and Part D is prescription drug coverage (government subsidized but coverage provided by private companies) which varies in price depending on the coverage desired and the company providing the coverage. There is also "Medicare Supplemental" which primarily pays for outpatient co-pays and the price will vary since it is not government subsidized and the coverage is provided by private companies.

A person on BE named lansbury was in a similar circumstance as you but he became a US citizen and didn't work in the US and was eligible Medicare at age 65 by piggybacking on his wife's work history. Although from information on the internet it appeared that he was eligible but initially he was told by social security that he was not. However eventually he got everything straightened out and was eligible. Later you can possibly start a thread in the USA forum if you need confirmation and hopefully he will respond.


Originally Posted by Noorah101 View Post
This thread is a continuation of RayAme's thread in the Marriage-Based Forum here: http://britishexpats.com/forum/showthread.php?t=798080

That thread is for his visa questions. This thread is for his taxes and insurance questions.

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Last edited by Sue; May 28th 2013 at 10:08 pm. Reason: Added Rene's post to beginning of this thread as an FYI
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Old May 26th 2013, 4:49 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

When I get my visa and I know I have 6 mths to get to USA, is there any pressure on me from the US government to sell my property here straight away. I have stated to the US lawyer that I will be selling up and using the funds to invest for an income.Financially I think I will be able to cope for a couple of years.
Firstly I want to get the best price for my property, and London UK prices are on the up.
Will I be allowed to come back to the UK to work about 4/5 months per year, till I reach 65 (3 yrs time). I will be filing taxes in the UK on that income. Thats also a reason to keep my property for a few years. Unless I find somewhere to stay for the time I work here. (Don't want to impose on family members here).
Our House in the USA, well my wifes house, is in her name solely. If I keep my UK property till 2016 will there be any US tax liabilities on the money I receive on the sale when I do sell up. (I am not familiar with US tax laws).
In the past I have used a money broker rather than a bank to transfer funds, the most being £25k. Not sure about the risk with my whole future lifes money. £250k. There are a few that offer really good rates well above bank rates. But I have heard stories of people transferring funds to India and the company doing the transfer going bust. Once the money is out of the UK theres no redress. I guess someone here has had good and bad experiences.
I know it's early days yet , I just want to be prepared.
Thanks to everyone so far you have eased our worries a bit..
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Old May 26th 2013, 4:57 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

You will have 6 months from the date of the medical to enter the US, NOT from the interview. There is no requirement for you to sell anything you don't want too, although bear in mind that a large influx of cash after you move is likely to incur some level of taxation.

You can leave the US for up to 6 months without needing a re-entry permit, although this time will be added to the time before you are eligible for citizenship.

Any movement of over £10k will require the submission of an FBAR. I am not terribly familiar with this, see http://www.irs.gov/Businesses/Small-...ccounts-(FBAR)
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Old May 26th 2013, 5:37 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

When I transferred £25k 3 yrs ago straight into our account, there was no query. Even the finance advisor didn't say anything about it when we mentioned it at the end of the tax year. I used it to purchase a boat.
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Old May 26th 2013, 6:47 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by civilservant View Post
There is no requirement for you to sell anything you don't want too, although bear in mind that a large influx of cash after you move is likely to incur some level of taxation.
The is no tax due for any amount of money transferred to the US. There may be scrutiny on large amounts by the IRS to try determine if money laundering is occurring, but no tax is due.

Any movement of over £10k will require the submission of an FBAR. I am not terribly familiar with this, see http://www.irs.gov/Businesses/Small-...ccounts-(FBAR)
FBAR isn't for movement of money but an IRS reporting requirement for foreign accounts of more than $10K once he becomes a legal permanent resident. There is now also a FATCA reporting requirement that both the individual as well as the foreign financial institution must follow to try to stop tax evasion. Bank secrecy Switzerland signed the FATCA reporting agreement since if it didn't, their financial institutions could be banned from doing business in the US (Credit Suisse with it's First Boston and UBS with it's Payne Weber would likely have to be sold which is about 35% of their business).

If money is electronically transferred, the US financial institution will report any movement of money exceeding $10K to the IRS for money laundering purposes. Only if an individual is carrying cash or checks exceeding $10K is he/she required to report the money to the IRS.

Originally Posted by RayAme View Post
If I keep my UK property till 2016 will there be any US tax liabilities on the money I receive on the sale when I do sell up.
US tax law allows an exclusion (no tax due) of $500K for married filing jointly on gains (selling price - purchase price - purchasing and selling fees) for selling a primary residence (property that you lived in for at least 2 of the previous 5 years). If you are renting the property when you are not in the UK, it will likely not be considered your primary residence for that year.

Normally people only have one primary residence so there isn't an issue but in your case, you have two (yours and your wife's) so it may be more complicated.

I don't think there will be a problem working in the UK for 4-5 months per year (income needs to be reported to the IRS but normally no tax will be due) but strong ties to the US must be maintained or you could possibly put your LPR status in jeopardy.

Therefore I'd suggest you have a consultation with both a tax attorney and an immigration attorney to determine if there are any issues before becoming a legal permanent resident or being treated as a resident for tax purposes. You'd want to make sure that your property will be eligible for the exclusion and that keeping the property and working 4-5 months in the UK does not affect your LPR status. Also you may want to make sure that in case you want to become a US citizen (may possibly be required to piggyback for Medicare) in three years, you may want to make sure that being out of the US for so much time doesn't delay becoming a US citizen.

Last edited by Michael; May 26th 2013 at 7:11 pm.
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Old May 26th 2013, 7:20 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Thanks Michael, you have stopped me sweating. I know that over here capital gains tax is high.

I won't be renting my property out in the UK, my sons live in it on a part time basis, (you know what kids are like). So the US will be my permanent residence.

My occupation as a London Cabby is convenient for working as when I wish, but if it messes anything up there I won't do it. I don't want to risk my future in the USA.

Thanks for now
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Old May 26th 2013, 7:32 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by RayAme View Post
Thanks Michael, you have stopped me sweating. I know that over here capital gains tax is high.

I won't be renting my property out in the UK, my sons live in it on a part time basis, (you know what kids are like). So the US will be my permanent residence.

My occupation as a London Cabby is convenient for working as when I wish, but if it messes anything up there I won't do it. I don't want to risk my future in the USA.

Thanks for now
US capital gains are taxed at a maximum of 15% unless total income for the year (including the gains) is over $450K and if you have to pay capital gains taxes in the UK, those taxes can be used as a foreign tax credit against US taxes for those gains. Since I don't know if you will need to pay UK taxes on the sale and if there isn't any UK taxes, it may be wise to make sure that the US exclusion applies. Then you can decide whether it may be more beneficial to sell or keep the property prior to becoming a US LPR.

Many that move to the US may rent their UK property and sell within three years and then purchase a home in the US and the exclusion applies since that was their primary residence for 2 of the previous 5 years. In your case, it is uncertain if the exclusion applies since your wife already has a primary residence but a tax accountant should know.

Last edited by Michael; May 26th 2013 at 7:47 pm.
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Old May 27th 2013, 6:07 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Thanks for the help so far.

My wife has her own T72, and we are debt free apart from my mortgage balance here in the UK. we are going to contact her tax adviser to help in deciding for me to sell before I leave here. I dont want to be hit with capital gains tax. The total sale price is about £350k less fees about £10k and outstanding balance I should be left with £220k = $330 under then capital gains tax level of $450k Unless they take the whole amount of £350 = $525k, but that won't be the amount transferred. Am I right in thinking it is only the balance I transfer and not the whole amount that is taxed?

OK I guess this sounds stupid, but what visa am I waiting for. Is it a CR1?
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Old May 27th 2013, 6:47 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by RayAme View Post
Thanks for the help so far.

My wife has her own T72, and we are debt free apart from my mortgage balance here in the UK. we are going to contact her tax adviser to help in deciding for me to sell before I leave here. I dont want to be hit with capital gains tax. The total sale price is about £350k less fees about £10k and outstanding balance I should be left with £220k = $330 under then capital gains tax level of $450k Unless they take the whole amount of £350 = $525k, but that won't be the amount transferred. Am I right in thinking it is only the balance I transfer and not the whole amount that is taxed?

OK I guess this sounds stupid, but what visa am I waiting for. Is it a CR1?
Capital gains has nothing to do with your outstanding balance but your purchase price. If you purchased the property for £160K and sold it for £350K and had fees of £10K, then you have a capital gains of £180K. I'm surprised that many on BE mistakenly quote the outstanding balance when talking about capital gains.
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Old May 27th 2013, 7:45 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Thanks Michael, I should be fine I purchased for £200k and the approx value is £350k I will have to pay agent fees of £10k when sold, hopefully I escape CG Tax.


OK as re: the USCIS our status is telling us we have been moved to the NVC and we have a LDN case number. Lawyer is about to submit our/my DS 230.
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Old May 27th 2013, 8:49 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by Michael View Post
The is no tax due for any amount of money transferred to the US. There may be scrutiny on large amounts by the IRS to try determine if money laundering is occurring, but no tax is due.
I don't believe that the IRS spends any time or effort looking for money laundering, based on the reports of wires received, however the receiving bank has a regulatory obligation to look for possible money laundering, so it is important to keep your bank informed of the reason for, and source of, large credits
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Old May 27th 2013, 8:59 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by Pulaski View Post
I don't believe that the IRS spends any time or effort looking for money laundering, based on the reports of wires received, however the receiving bank has a regulatory obligation to look for possible money laundering, so it is important to keep your bank informed of the reason for, and source of, large credits
I believe you are right. I think the banks only report suspicious transfers to the IRS.
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Old May 28th 2013, 12:35 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by Michael View Post
...... I'm surprised that many on BE mistakenly quote the outstanding balance when talking about capital gains.
Very few people in the UK pay capital gains tax, so most people have no familiarity with it, and unless they have any sort of financial training or interest in personal investing they may have little, if any, awareness of capital gains tax, what it means, or how it is calculated.
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Old May 28th 2013, 2:11 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by Pulaski View Post
Very few people in the UK pay capital gains tax, so most people have no familiarity with it, and unless they have any sort of financial training or interest in personal investing they may have little, if any, awareness of capital gains tax, what it means, or how it is calculated.
Most Americans and overall not known to be "financial" or "mathematical" geniuses are in the same boat and I've never heard anyone refer to their outstanding balance when referring to capital gains. Maybe Americans refinance their homes more often and pull out equity than Brits and it dawns on them that the outstanding balance doesn't play a role in determining capital gains.
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Old May 28th 2013, 2:49 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by Michael View Post
Most Americans and overall not known to be "financial" or "mathematical" geniuses are in the same boat and I've never heard anyone refer to their outstanding balance when referring to capital gains. Maybe Americans refinance their homes more often and pull out equity than Brits and it dawns on them that the outstanding balance doesn't play a role in determining capital gains.
Except that CGT on homes was a very real issue in the US prior to 1997, especially for those downsizing or moving to an area where homes were cheaper, and even today there are some strings attached to the general exemption in the US of your primary residence from CGT. Whereas in the UK there has not been CGT (at all, under any circumstances) on your primary residence for decades (if ever?).

Last edited by Pulaski; May 28th 2013 at 3:42 pm.
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