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Topic: state tax question on uk and us income, indefinitely?  (Read 617 times)

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state tax question on uk and us income, indefinitely?
« on: February 26, 2009, 04:44:09 PM »
hello,

so i have read through the forum and searched online and understand the basics of how things work when you have spent the entire year in the uk and can claim credit on federal taxes for uk income.  i also understand that i will need to look into giving up my massachusetts residency in order to avoid state taxes there...but here is where things get tricky:

i have been offered the chance to teach online courses for my current employer (a college in masschusetts) while i am living and working in the uk.  this means i will indefinitely have both uk and us sources of income.  how exactly does this work with state and federal taxes?

do i pay us taxes on the us income and uk taxes on the uk, and claim the exemption on my us forms?

what about state taxes-- since i will owe mass. taxes on the money from the employer there, does that mean they can also tax my uk money?  what about if i establish my residency somewhere else, could they only tax the us-based money then?

does anyone know if it would be worth trying to establish residency in north carolina, where my mother lives? i'm struggling to find information on how they deal with international income. 

given that the teaching income will not be very much money, would i be better off just not accepting the offer for 2009, to avoid being taxed on the uk income (i will have to deal with this either way since i am moving over to england in the middle of 2008)?

i suppose i should also ask the question: do i need to pay uk taxes on the us source of income while i am in the uk?  it will be us-based work since i will do it online from the uk, paid into a us bank account.  i will be paying uk taxes once i have a full-time uk-based job (i have a tier 1 general visa).


« Last Edit: February 26, 2009, 04:53:09 PM by lilybelle »


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Re: state tax question on uk and us income, indefinitely?
« Reply #1 on: February 27, 2009, 07:03:56 PM »
i've done some digging around, and it looks like north carolina allows you to claim a tax credit for tax paid to another state or country.  i think i will look into establishing domicile there (since my mom lives there and i grew up there) and give up my mass. license and voter registration.  i'm wondering if i need to fill out the NC form each year still...will need to investigate some more.

my next step is to investigate whether i can pay MA state taxes as a nonresident on the part-time income i will have coming in while in the UK, and then file a NC resident form but claim a credit for income in both the UK and MA, thus not paying any state taxes at all except for the small amount i would owe MA?  this could get tricky.  it wouldn't be worth taking the part-time work at all if i ended up having to pay MA taxes on my UK income, as well.  it would be equivalent to what i was being paid for the part-time work. 




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Re: state tax question on uk and us income, indefinitely?
« Reply #2 on: February 27, 2009, 10:01:15 PM »
Sorry, I have no advice, Lily, but I just had a little giggle to myself:  I thought your subject said INFIDELITY rather than indefinitely and thought this was going to be a very scandalous post :)   Hope someone comes around with a more helpful answer!


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Re: state tax question on uk and us income, indefinitely?
« Reply #3 on: February 27, 2009, 10:05:10 PM »
haha now that you pointed that out, it's all i see when i look at the subject, as well!!


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