US Taxes

I was just wondering, I hopefully will be working in April or May. Do I still have to pay taxes in the US even though Im living here now? If I do, what form to fill out and what taxes I will be paying? Thanks.

You have to file US tax forms, but it's not likely you will owe any tax.  US citizens are taxed on their worldwide income.  You are allowed to offset your overseas income from your job with the Foreign Earned Income Exclusion (Form 2555, up to $80,000 is excluded), you can offset your taxes with the Foreign Tax Credit (Form 1116), and the US/UK Treaty can also be used here and there to reduce your taxable income (particularly certain pension clauses).

Even if you earned no money, you may have a filing requirement for a Foreign Bank and Securities Accounts Report (Form TD F 90-22.1).  You must file this form each year you:
    a)  Have assets in foreign bank(s) that exceeded $10,000, including joint accounts.
    b)  Have signature authority over another person's (or company's) bank account that was in excess of the $10,000 limit.   These accounts could include:
          i)    minors,
          ii)   elderly relatives,
          iii)  your employer's accounts, and
          iv)  charity or church accounts.

do you know the exchange rate we use for 2005-2006 taxes..thanks

If you want 2005-06 UK then the UK HMRC will publish a rate around May 2006.  If you want calendar year 2005 then the IRS London Embassy website will have the info!

I have looked on the UK HMRC website and there is still no information on the exchange rates to use for 05-06.  In fact the last rate that they've published is for 31 March 05.

When I called them to ask when it would be published, they had no idea (not a surprise), but they did say that they would accept a rate from a bank or a financial adviser.   So I gusee I will call HSBC and see what they have to say.

Do you have a number you are using Lizzit?

Thanks

You can get close (but NOT exact) at www.oanda.com.  Go to historial prices and look at the average price for the entire period.  It is NOT the official rate, but it's darn close.  You can print it off as your backup proof.

Even if you earned no money, you may have a filing requirement for a Foreign Bank and Securities Accounts Report (Form TD F 90-22.1).  You must file this form each year you:
    a)  Have assets in foreign bank(s) that exceeded $10,000, including joint accounts.
    b)  Have signature authority over another person's (or company's) bank account that was in excess of the $10,000 limit.   These accounts could include:
          i)    minors,
          ii)   elderly relatives,
          iii)  your employer's accounts, and
          iv)  charity or church accounts.

Really?  Wow!  I didn't know that.  Doesn't apply to me, but dang, $10,000 isn't that much.

Does this mean that you don't have to list any accounts where the value is less than $10,000?

Does this mean that you don't have to list any accounts where the value is less than $10,000?

Yep, that is correct.  You only need to list accounts that had a value of $10000 or more.  Also remember, it is not what your balance is at the end of December.  Even if you reached this balance or exceeded for only one day, and then your balance dropped below it, you still need to file the form.  That is how I understand the rule.

I am afraid that this is not how I understand the rule.

If you had ONE account that topped $10,000 for a day (say you got a good paycheck one month) then you MUST list ALL foreign bank and security accounts; including those you had signature over (such as clubs, residents associations, business accounts at work, ISAs etc etc).

I am afraid that this is not how I understand the rule.

If you had ONE account that topped $10,000 for a day (say you got a good paycheck one month) then you MUST list ALL foreign bank and security accounts; including those you had signature over (such as clubs, residents associations, business accounts at work, ISAs etc etc).

Yep, you're correct, just looked at the form and it mentions that if one account exceeds $10000, all foreign accounts need to be listed.

Yep, you're correct, just looked at the form and it mentions that if one account exceeds $10000, all foreign accounts need to be listed.

I'm beginning to really hate the US gov't/IRS.  Where's a good old fashion French Revolution when you need one?  Robespierre anyone? 
Fortunately, I have been listing the accounts, even the one I have signature authority over but couldn't spend personally.

Thanks for the information.

Matt - just curious; how many forms have you done then (not pages) just forms; at least 2 I guess , one for the accounts in your own name plus one for the joint accounts - or have you also done a third separate form for the signature authority accounts?

I just fill out the form with all the accounts together.  Why would I need to do separate forms?  they let you list something like 20 or 25 accounts I think?

I am afraid that this is not how I understand the rule.

If you had ONE account that topped $10,000 for a day (say you got a good paycheck one month) then you MUST list ALL foreign bank and security accounts; including those you had signature over (such as clubs, residents associations, business accounts at work, ISAs etc etc).

This still is incorrect.  Quoting the instructions:  "...if the AGGREGATE value of these accounts exceeds $10,000 at any time during the calendar year..."

This means if you have two accounts with $6,000 each then the aggregate amount of $12,000 exceeds the threshold and you have to file a form for all accounts you hold.

This keeps people from spreading the cash around to avoid reporting.