Originally Posted by JAJ

Here's how it works, in general.

As a non-resident alien, you pay tax at the normal U.S. rates on your U.S. source income. In particular, your employment income, any U.S. rentals, etc. If you have U.S. dividends, interest, or certain other types of income, special tax rates apply, usually dependent on tax treaty.

You cannot take the normal standard deduction (other than in exceptional cases), or most itemized deductions. However you can claim a personal exemption as normal, and you can take certain itemized deductions such as state income tax.

If you want to figure out your tax in advance, you need to carefully work through the form 1040NR form + instructions, plus publication 519, plus any other relevant information on the IRS website. Start here:
Taxation of Nonresident Aliens

Effectively, (as far as I understand) there is still usually a tax benefit in only have part-year income. Since although you don't get quite as many deductions as those available to U.S. residents, you do get the benefit of the lower tax bands even though you do not have a full year's income.

In your previous threads, you suggested you would be on L visa/status. If you are an intra-company transfer employee, have you got a certificate of exemption that allows you to continue paying National Insurance rather than U.S. Social Security tax? Also, is your employer paying for you to have professional tax assistance (first year tax returns are more complex than usual) and if not, why not?

Originally Posted by JAJ

In your previous threads, you suggested you would be on L visa/status. If you are an intra-company transfer employee, have you got a certificate of exemption that allows you to continue paying National Insurance rather than U.S. Social Security tax? Also, is your employer paying for you to have professional tax assistance (first year tax returns are more complex than usual) and if not, why not?

Originally Posted by Cook_County

US tax return filing is mandatory - the system is simply different from the UK system. You agreed (perhaps not knowingly) to dealing with annual income tax and informational return filing when you chose to move to the United States.

Originally Posted by unique_boy

I do not have that exemption. From what I read I did not know you had the option to continue to pay NI rather than social security. I thought the tax treaty was in place do you don't have to pay both. ....

Originally Posted by Pulaski

You might not "have to" pay both, but depending on how long you work in each country (US & UK) it is quite possible to "double dip" and get a "full" pension from both governments. ..... This would require paying voluntary NI in the UK, and if you can get approved for "Class 2" contributions, they are a bargain.

Originally Posted by unique_boy

They have not provided that service and that is because I did not ask for it, which was a mistake on my part. However indirectly they are as they gave me a relocation package which they have said should be used for taxes though I am trying to get around this.

Originally Posted by Giantaxe

Just remember that some of that "relocation package" could itself be taxable income...

Originally Posted by unique_boy

I have read into it but decided right now it is not worth paying voluntary NI in the UK as I still have about 38 years to UK retirement age and around 10 years of contributions already.

I decided to wait until where I settle long term is more settled.

Originally Posted by Owen778

There are good reasons to choose not to contribute to NI, but I don't think that's one of them. Your UK pension will pay out wherever you live.

Originally Posted by Pulaski

38 years out sounds a lot, but he would need to accumulate 25 more years contributions under the "new" rules. Who knows what the pay-out criteria will be 38 years from now, but £142/yr is hard to beat as an investment.

He might want to reinvestigate 7 years from now when (under current rules) he could back-pay to 2014. At very least he should reinvestigate 19 years from now when (under current rules) he can back-pay enough years to still get himself to 35 years of contributions by retirement age.

Originally Posted by Owen778

There are good reasons to choose not to contribute to NI, but I don't think that's one of them. Your UK pension will pay out wherever you live.

Originally Posted by Pulaski

38 years out sounds a lot, but he would need to accumulate 25 more years contributions under the "new" rules. Who knows what the pay-out criteria will be 38 years from now, but £142/yr is hard to beat as an investment.

He might want to reinvestigate 7 years from now when (under current rules) he could back-pay to 2014. At very least he should reinvestigate 19 years from now when (under current rules) he can back-pay enough years to still get himself to 35 years of contributions by retirement age.

Originally Posted by unique_boy

What is a good reason?

I did not move to the US thinking that I will live here forever. I moved because my employer offered me an opportunity that was very good for my career. If in 3 years I decide I want to make my life here I will reconsider my voluntary NII contributions.

In 3 years if I move back to the uk I would only be 30 and with current pension age at 68 and needing 30 years of contributions of which I have 7-10 roughly already.

Paying voluntary contributions would be lost money as I would still be working another 30 years in the UK

Originally Posted by GeoffM

For a moment I thought you meant a deduction: not so if the employer paid for it? But moving expenses, if paid for by yourself, is. However then I read your response again I'm not so sure - but I'll leave my comments anyway!

Originally Posted by Giantaxe

Read the full comment from the OP I was replying to... the implication seeming to be that they were getting a relocation pot of money from their employer that could be used to pay for, amongst other relocation-related costs, the cost of a first-year tax return. If that's the case, that "pot" would likely be considered taxable income and only offset by incurred relocation costs that are specifically deductible - which doesn't include things like tax preparation.