US tax filing with US and UK income confusion
#1
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US tax filing with US and UK income confusion
Hi Folks
Please help me to understand my US tax filing for the current year for my complicated situation. I started UK job mid last year and did hold on to US job (reduce hours) to finish on-going projects for rest of the last year.
My UK salary has been taxed by hmrc. Since there is double treaty clause between US-UK, is there need to mention UK income at all when filing US taxes. Just making sure that I follow UK and US tax rules correctly and not to screw up with other thinigs in the future (coming back to US, travel to US, new job in usa etc etc.)
thanks for help.
Cheers
Please help me to understand my US tax filing for the current year for my complicated situation. I started UK job mid last year and did hold on to US job (reduce hours) to finish on-going projects for rest of the last year.
My UK salary has been taxed by hmrc. Since there is double treaty clause between US-UK, is there need to mention UK income at all when filing US taxes. Just making sure that I follow UK and US tax rules correctly and not to screw up with other thinigs in the future (coming back to US, travel to US, new job in usa etc etc.)
thanks for help.
Cheers
#2
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Joined: Apr 2016
Location: Chicago, Illinois
Posts: 334
Re: US tax filing with US and UK income confusion
Yes, regardless of the treaty you must declare your foreign earned income for the tax year on your return. That being said; based on the country of your foreign earnings, you'll most likely be awarded a "credit" based on the tax paid to HMRC. If you're using a filing tool like TuroTax, they'll walk you through this. But to be clear it does need to be entered, even if you've already paid tax on it elsewhere in the world.
#3
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Re: US tax filing with US and UK income confusion
Yes, regardless of the treaty you must declare your foreign earned income for the tax year on your return. That being said; based on the country of your foreign earnings, you'll most likely be awarded a "credit" based on the tax paid to HMRC. If you're using a filing tool like TuroTax, they'll walk you through this. But to be clear it does need to be entered, even if you've already paid tax on it elsewhere in the world.
I will be in touch for additional questions, if any.
thanks again.
#4
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Re: US tax filing with US and UK income confusion
Yes, regardless of the treaty you must declare your foreign earned income for the tax year on your return. That being said; based on the country of your foreign earnings, you'll most likely be awarded a "credit" based on the tax paid to HMRC. If you're using a filing tool like TuroTax, they'll walk you through this. But to be clear it does need to be entered, even if you've already paid tax on it elsewhere in the world.
#5
Re: US tax filing with US and UK income confusion
Your tax accountant is wrong. Get a second opinion.
Rene
Rene
#6
Re: US tax filing with US and UK income confusion
Report all income, worldwide.
Then apply deductions/credits.
Then apply deductions/credits.
#7
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Re: US tax filing with US and UK income confusion
thanks guys for the reply. Can you please provide me specific sections of tax laws or IRS guidelines to argue with my accountant.
#9
Re: US tax filing with US and UK income confusion
https://www.irs.gov/businesses/incom...oad-is-taxable
Just to be clear...you were a US tax resident in 2018?
Just to be clear...you were a US tax resident in 2018?
Last edited by Hotscot; Mar 23rd 2019 at 12:42 am.
#10
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Re: US tax filing with US and UK income confusion
https://www.irs.gov/businesses/incom...oad-is-taxable
Just to be clear...you were a US tax resident in 2018?
Just to be clear...you were a US tax resident in 2018?
#11
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Re: US tax filing with US and UK income confusion
yes I am US tax resident for year 2018, but I am not US citizen. I am on a J1 visa, this is a temporary exchange visa.
#12
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Re: US tax filing with US and UK income confusion
https://www.irs.gov/businesses/incom...oad-is-taxable
Just to be clear...you were a US tax resident in 2018?
Just to be clear...you were a US tax resident in 2018?
I am neither of these two.
#13
Re: US tax filing with US and UK income confusion
Yes but you may be a tax resident for IRS purposes.
https://www.irs.gov/individuals/inte...-presence-test
https://www.irs.gov/individuals/inte...-presence-test
#14
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Re: US tax filing with US and UK income confusion
As a J-1 visa holder the days in the United States are not counted for the purpose of the substantial presence test. As a non-resident alien you are only subject to US tax on US source income. If you are a UK resident, the UK will tax you on worldwide income.
#15
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Re: US tax filing with US and UK income confusion
cheers
Last edited by ethreal123; Mar 23rd 2019 at 5:56 pm. Reason: typo