Do I need to file UK taxes?

Hello,

I live in the UK with my husband who is British, I'm a US Citizen. Last year I did a US tax return from the UK as I was technically self employed in the USA (doing surveys online). When I go back to the USA to visit family, I also earn cash on the side while in the USA by doing surveys, but only when I'm in the USA. I am not employed otherwise and earn no money in the UK. My husband does transfer money to my US bank account from his UK bank account.

I will be reporting my "self employment" income for my US taxes again this year from the UK to the IRS. However, I'm very confused if I need to be reporting or doing taxes for the UK, if my husband transfers money to my US bank account which technically is gifting me money, and on the US self employment I do when I am visiting the US?

Thanks

Hello,

I live in the UK with my husband who is British, I'm a US Citizen. Last year I did a US tax return from the UK as I was technically self employed in the USA (doing surveys online). When I go back to the USA to visit family, I also earn cash on the side while in the USA by doing surveys, but only when I'm in the USA. I am not employed otherwise and earn no money in the UK. My husband does transfer money to my US bank account from his UK bank account.

I will be reporting my "self employment" income for my US taxes again this year from the UK to the IRS. However, I'm very confused if I need to be reporting or doing taxes for the UK, if my husband transfers money to my US bank account which technically is gifting me money, and on the US self employment I do when I am visiting the US?

Thanks

I am not a tax pro but here are my thoughts.

There is no limit and no reporting required for spouses to transfer money between themselves, in either country.

HMRC taxes its residents on their worldwide income so any money you earn in the USA is taxable, however every person has a tax free allowance of £12,750 so if your earnings are below that then no tax filing is needed.

Here are the rules for who must file taxes in the USA.  Your tax status can only be Married Filing Jointly or Married Filing Separately. I’m pretty sure that is correct.
https://www.irs.gov/newsroom/who-needs-to-file-a-tax-return

It doesn’t sound like your husband has any US income so Married Filing Separate is the best option and if your income is over $5 you should file a tax return in the US. The tax deduction for married filing separately is $14,600 so you almost certainly won’t owe taxes and there are free fillable forms available for filing.

There is no limit and no reporting required for spouses to transfer money between themselves, in either country.

That is not necessarily true (from the US perspective) if the spouse is not a US citizen. In this particular case though, since the USC is the giftee there would be no IRS requirements (unless the foreign spouse is a former US citizen or green card holder who meets the definition of a "covered expatriate").

That is not necessarily true (from the US perspective) if the spouse is not a US citizen. In this particular case though, since the USC is the giftee there would be no IRS requirements (unless the foreign spouse is a former US citizen or green card holder who meets the definition of a "covered expatriate").

Yes, I believe the giftee is never required to report gifts, that is the responsibility of the gifter.

Would you know how to report a gift you received from anyone? I ask because in the past we have gifted money to our children while we all lived in the the USA and I told them it was up to us to report any gifting, not them. (IRS form 709?)

Self - employed activity is primarily taxable by the UK. You'll be filing self assessment tax returns. In the US self employed activity is reported on Schedule C and Form 8858 plus Form 1116 and/or 2555. A copy of a certificate of coverage from HMRC is attached to the US return.

Thank you all for the input. Yeah, it's very confusing for me and not so straightforward. I will be filing as married filing separately so yes my reporting threshold for the IRS is 5.00 indeed. I end up paying taxes since I also have to pay lovely NYS things like Medicare etc. are withheld, and since I don't do estimated payments through the year, I just do it all in one lump at the end of the year for whatever online earnings I do make, usually $ 400.00 to $ 500.00 for odds and ends, Christmas stuff etc. It does not sound like I would need to do any UK taxes then? as this would be the first year, I'm technically considered a resident in the UK. Any good tax programs? I used Tax Free Usa last year but ran into some issues towards the end with having no ssn for my husband. I ended up manually handwriting it in and had to pay extra to print etc. The other thing about "self employment" if you do surveys and such things is technically the IRS rules say you don't have to report anything under 500.00 but technically there's always that warning of if you don't then we may come after you as well. I just didn't want to run into any issues with the UK side of things as well.

When my husband transfers money to me it's converted from GBP to USD in my US bank account so that's why I was really worried about owing on any of that stuff as well, it's very mind boggling, but yes this would fall under the gifting category. I think the last I read on it, the USA has no limit on how much you can gift to another person and vise versa yes.

I’ve not used any tax software other than TurboTax which is way more than you need.

There is a reporting limit for gifting in the USA for US tax payers. Gifts of about $36k or higher should be reported on IRS form 709 but that is for information only as your husband is not a US taxpayer, plus I don’t believe transfers of money between husband and wife are unlimited and not considered as gifts.

Any good tax programs? I used Tax Free Usa last year but ran into some issues towards the end with having no ssn for my husband. I ended up manually handwriting it in and had to pay extra to print etc.

OLT is very good (free if AGI is $48k or less) and allows NRA input directly so I hear, so no need to print out and mail in.

Yeah the amount my husband sends from his UK bank account to my US bank account is nowhere near that gifting limit, the IRS states "For gifts or bequests from a nonresident alien or foreign estate, you are required to report the receipt of such gifts or bequests only if the aggregate amount received from that nonresident alien or foreign estate exceeds $100,000 during the taxable year. If the gifts or bequests exceed $100,000, you must separately identify each gift in excess of $5,000."

I believe it would be categorized under gift as I don't believe it would constitute as income, inheritance, or earnings as my husband is sending me money. So, if I've got this right, it doesn't look like I have any tax implications for these transfers UK or US side. Since I am also not earning it looks like I have nothing to report UK tax wise?

Thank you all for the input. Yeah, it's very confusing for me and not so straightforward. I will be filing as married filing separately so yes my reporting threshold for the IRS is 5.00 indeed. I end up paying taxes since I also have to pay lovely NYS things like Medicare etc. are withheld, and since I don't do estimated payments through the year, I just do it all in one lump at the end of the year for whatever online earnings I do make, usually $ 400.00 to $ 500.00 for odds and ends, Christmas stuff etc. It does not sound like I would need to do any UK taxes then? as this would be the first year, I'm technically considered a resident in the UK. Any good tax programs? I used Tax Free Usa last year but ran into some issues towards the end with having no ssn for my husband. I ended up manually handwriting it in and had to pay extra to print etc. The other thing about "self employment" if you do surveys and such things is technically the IRS rules say you don't have to report anything under 500.00 but technically there's always that warning of if you don't then we may come after you as well. I just didn't want to run into any issues with the UK side of things as well.

When my husband transfers money to me it's converted from GBP to USD in my US bank account so that's why I was really worried about owing on any of that stuff as well, it's very mind boggling, but yes this would fall under the gifting category. I think the last I read on it, the USA has no limit on how much you can gift to another person and vise versa yes.

Not meaning to be nosy here, but why are you reporting this as self-employment? Do you intend to be supporting yourself on it?  If it's only a small amount of income, you could possibly go with declaring it as hobby income, aka "Activity not engaged in for profit income" on a Schedule 1 form. That would have it taxed at your base rate, with no need for Medicare taxes, etc., to come out of it.  Something you might want to look at.

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax-purposes

Not meaning to be nosy here, but why are you reporting this as self-employment? Do you intend to be supporting yourself on it?  If it's only a small amount of income, you could possibly go with declaring it as hobby income, aka "Activity not engaged in for profit income" on a Schedule 1 form. That would have it taxed at your base rate, with no need for Medicare taxes, etc., to come out of it.  Something you might want to look at.

Hello,
 No worries, the reason I always choose to report it as self-employment to the IRS is because it's simply much harder, I feel, to prove to the IRS that it is hobby related income vs their definition of " if there is intent to make profit or if it occurs on a regular basis" and how they may end up deeming it. From everything I researched on it in the past it's notoriously more difficult to prove otherwise and it makes the chances of having an audit done higher. I do use the money towards Christmas items, personal items, even sometimes towards veterinarian bills. The only good thing about claiming it as such is at least it goes towards SSI, it's not much but it's something. I will look into it for sure thank you.