jonball

Hello all!
Lucky me, I have recently discovered that as an American citizen (purely passport from birth, not lived there for nearly 20 years) that I should have been filing my tax returns, I have only been in employment for the just under 3 years and understand that I must file taxes for my past 3 years work here in the UK, I have had a look and understand that i need to fill out forms 1040 and 2555, it is slightly more complicated as I have been self-employed since April of this year. Luckily as a contractor I have only received a salary, no pension and I have all my payslips and P60s. Does anyone know how straight forward this would be to fill out? I am moving to America in December and am thinking it may be easier to get an accountant but if it is possible to complete this myself it could save a small fortune! any ideas??

meauxna

Your lovely local IRS is said to be *very* helpful to those in the same situation: http://london.usembassy.gov/irs/irsfaq.htm

You should be able to do it accountant-free.

penguinsix

Hi,

It shouldn't cost a fortune. You can always buy TurboTax or TaxCut pro for about $30 and have it do most of the heavy lifting for you. Unless you are making over $80k US (£40k) you won't have any tax liability because it will be eaten up by the foreign tax credit.

If you have no tax liability you don't have to file. So if you haven't made that much, you aren't really in any trouble for not filing. However, it is recommended that even in those situations where you don't have any tax liability (but do have income) you file the paperwork anyway to have a 'paper trail.'

Might I suggest posting this message over on the US expats in the UK site? They might have better recommendations about local (i.e. UK-based) US tax assistance and accountants.

http://talk.uk-yankee.com/

jonball

Thanks for all that info, I think it could prove to be a great help!! will check out the other forum too just to make sure I got all corners covered!
Thanks

jonball

One last quick westion is that it is looking I might go over the $80k threshold for this year, only by a few thousand, does anyone know what the resulting consequence is? From January 15th I was employed through til April, then from April 1st I was self employed, the combination of the two jobs should exceed the $80k mark, any ideas?

penguinsix

On your US taxes you get a number of deductions. You get a standard deduction for yourself (about $5000) and personal exemption ($3,000) and you can get deductions for some of the expenses you had as a self-employed individual (i.e. office supplies, business travel, etc--see Schedule C). You will also get some credit for any UK taxes paid, so the $80k figure is just a ballpark (I think it is $82k actually).

There are a lot of sites for expat tax assistance.

http://www.jamesdance.com/us_expatriates.htm

Just search 'expat US taxes' and you'll find scads of info.

If this is your first time filing (and it sounds like it is) I really would recommend spending $30 or so for 'Turbo Tax'. It will walk you through the form, in English (more or less) and tell you what to put where. It will ask you all sorts of weird questions (trying to save you more money) like 'Are you a blind person over 65' and 'Do you have Solar Panels on your house' and such.

But also check out the US/UK board as they have many people there who know all the ins and outs of the $82k tax credit and US-UK tax issues and even what to do when you forget to file (many of them are shocked when they find out they have to file eventhough they moved to the UK decades ago).

Good luck.

jonball

thats brilliant!!! thanks a lot, I will get Turbo tax, might prove to be a great help. Just been working out all my income etc... Looks like it might be well over the £82k mark which is rubbish!! but thank you!!!

jonball

Is the US tax year the same as UK, would I count my yearly income from April to April, not January to December, I hope its the same as UK as that would let me off lightly!! If the take into account my earnings from January to April I am pushing the $100k mark which cant be good for taxes

Jerseygirl

The US tax year is 1st Jan to 31st Dec...just to mix it up a little.

jonball

Rubbish! Better just try and make it up with form 1116!

ugacrew

'Fraid so. Deadline to file in the US is April 15 however. Good luck with your returns.

BritGuyTN

FWIW anyone can get an extension till october if you want to put things off...

jenniferpa

Don't forget though: even if you file an extension (as we always do) you still have to send them estimated tax due cheque for the April 15th date. We're self-employed so we always owe them rather than the other way around. I would place my vote for Turbotax as well - even my children can use that (although I expect there are others as good).