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Topic: US tax filing for split income  (Read 1258 times)

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US tax filing for split income
« on: February 03, 2022, 12:21:47 PM »
Hello,

I’ve always used free online tools to do file my income tax return in the US. Now I live here in the UK, I am very confused about what to do and whether I should continue to file online or enlist professional help who are insanely expensive.

In 2021, I was employed by my US employer until I got my residency in the UK. My employer changed my contract to a UK contract and moved me to the UK payroll and started paying taxes here from roughly mid year. So my income for 2021 is split between UK and US. Is this something I can do easily on TurboTax or H&R Block? Or do I need to get an actual accountant to do it this year? Anybody with a similar experience?

Thank you


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Re: US tax filing for split income
« Reply #1 on: February 03, 2022, 12:33:56 PM »
From the day you became tax resident in the UK your worldwide income from that day is taxable in the UK.  If you are a "US person" then the US will continue to tax your worldwide income regardless of where you reside.  You can continue to file your US taxes as you have always done, but with your UK address which will double your FATCA reporting allowances. You will file your UK return as a single person and your spouse will also file as a single person if they have taxable income.

For the UK you can create an HMRC online account and file online, and/or use tax software like TaxCalc to file.
Dual USC/UKC living in the UK since May 2016


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Re: US tax filing for split income
« Reply #2 on: February 03, 2022, 12:53:08 PM »
From the day you became tax resident in the UK your worldwide income from that day is taxable in the UK.  If you are a "US person" then the US will continue to tax your worldwide income regardless of where you reside.  You can continue to file your US taxes as you have always done, but with your UK address which will double your FATCA reporting allowances. You will file your UK return as a single person and your spouse will also file as a single person if they have taxable income.

For the UK you can create an HMRC online account and file online, and/or use tax software like TaxCalc to file.

Thank you

My W2 only reflects the first few months in which I was under the US payroll. The rest of the years isn’t reported in the W2, as I was moved to the UK payroll. How do I report the UK earned income to the IRS?


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Re: US tax filing for split income
« Reply #3 on: February 03, 2022, 02:16:42 PM »
Thank you

My W2 only reflects the first few months in which I was under the US payroll. The rest of the years isn’t reported in the W2, as I was moved to the UK payroll. How do I report the UK earned income to the IRS?

I use a substitute 1099 for my UK pensions so I think I would use a substitute W2 for my UK earnings or exclude it under FEIE using form 2555 which is what my son does.
Dual USC/UKC living in the UK since May 2016


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Re: US tax filing for split income
« Reply #4 on: February 03, 2022, 03:41:06 PM »
I use a substitute 1099 for my UK pensions so I think I would use a substitute W2 for my UK earnings or exclude it under FEIE using form 2555 which is what my son does.

Thank you, I’ll look into the 2555 form and FEIE


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Re: US tax filing for split income
« Reply #5 on: February 03, 2022, 07:10:43 PM »
Thank you, I’ll look into the 2555 form and FEIE

Let us know how you get on. Being retired I can’t use FEIE so I use substitute 1099-R forms to report my UK private pensions then claim foreign tax credits for the UK taxes paid. I also pay UK taxes on my US pensions and also claim those taxes back on my US return.
Dual USC/UKC living in the UK since May 2016


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Re: US tax filing for split income
« Reply #6 on: February 04, 2022, 09:13:55 AM »
Let us know how you get on. Being retired I can’t use FEIE so I use substitute 1099-R forms to report my UK private pensions then claim foreign tax credits for the UK taxes paid. I also pay UK taxes on my US pensions and also claim those taxes back on my US return.

Thank you, I sure will let you know


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