I just recently accepted a job offer w/the U.S. Government and I had several questions about the deductions for taxes for both U.S. and the UK. It states in my offer letter,
"As an American Citizen your salary will be affected by appropriate U.S. tax and Social Security deductions in accordance with current regulations. You are responsible for contacting the appropriate federal/state authorities concerning your overall liability for these deductions. Depending on your personal circumstances (e.g., nationality, residency) you may be liable to pay tax and social security to the UK government or another country's government."I was told that once I start my position I could meet with an IRS representative from the building who will work this all out for me. My questions for the time being are: What is the percentage of taxes they take out for Americans that are working abroad? Is it in a totally different category? I would assume my NY State taxes would be exempt since I am a resident here?? Although with NY taxes you never know. I have never worked here so I have no clue what to expect when it comes to taxes. I'm assuming I'm going to be hit double.
Taxes that would be taken out on the U.S. side. I know full well that it would be of course the Federal withholdings, Federal FICA, and Federal OASDI (for those who feed off our hard earned dollars). Looking at an old paystub of mine that's a lot of $$ plus the UK taxes too??
Of course I was making a helluva lot more money in NYC than I am going to be making here so my tax bracket was placed in a higher category. But I'm hoping since the salary is nothing compared to my previous salary I would be put in a lower bracket (for the U.S side) anyway?
The UK tax story side is a totally different ballgame for me. What are the percentage of taxes taken out here? And what are you specifically paying into (or should I say who is feeding off of our paychecks)? I'm not asking for specific numbers here just ballpark range as I truly do not know.
Any help prior to my meeting w/the IRS rep would be great along with any other helpful tidbits you think I should know too.
P.S. Just did a little searching and found this: "If you are a United States citizen with a tax home in a foreign country and you meet the bona fide residence test or physical presence test, you may exclude up to $80,000 in the year 2003 and thereafter."
http://www.irs.gov/faqs/faq13-7.html So I'm now assuming I am exempt
with the exception of course --- for the UK side of my obligations.
