Self-employed -Events in both US and UK, who gets my taxes?

Hi there,

I'm a self-employed Yank who started my own creative arts business in January.  I run art-related events and up til now have only held them in the UK.  I've yet to pay any tax, though I am freshly registered and taxes have to be done by Feb. 

In 2013 I'm running an event back in the States.  I have money already coming in via PayPal for this event, and it's in USD.

Simultaneously, I have money coming in for UK events, via PayPal, in Pounds Sterling.

Do I pay tax in the US or UK?  I'm in a brain spin over this, not sure whether to convert my Pounds to Dollars or vice versa in PayPal to make bookkeeping easier. 

I would be so appreciative of any advice!  Thanks so much!

It is not difficult.

The UK charges tax on your workdwide business profits. The UK gives credit for foreign tax payable on those same profits.

The US will tax you on worldwide income but give credit for foreign tax on foreign source income. In calculating the foreign tax credit the US will treat profits attributable to US source business as US source so you might owe US tax on that percentage of your profits (although you might be able to claim additional credit for UK tax under the resourcing article of the tax treaty; so you should read that in particular). There is quite likely State income tax in any case.

Is FICA an issue because the work is going to be done in the US.......or does the social security agreement mean that it's not relevant if the OP is paying UK NI