hello,
so i have read through the forum and searched online and understand the basics of how things work when you have spent the entire year in the uk and can claim credit on federal taxes for uk income. i also understand that i will need to look into giving up my massachusetts residency in order to avoid state taxes there...but here is where things get tricky:
i have been offered the chance to teach online courses for my current employer (a college in masschusetts) while i am living and working in the uk. this means i will indefinitely have both uk and us sources of income. how exactly does this work with state and federal taxes?
do i pay us taxes on the us income and uk taxes on the uk, and claim the exemption on my us forms?
what about state taxes-- since i will owe mass. taxes on the money from the employer there, does that mean they can also tax my uk money? what about if i establish my residency somewhere else, could they only tax the us-based money then?
does anyone know if it would be worth trying to establish residency in north carolina, where my mother lives? i'm struggling to find information on how they deal with international income.
given that the teaching income will not be very much money, would i be better off just not accepting the offer for 2009, to avoid being taxed on the uk income (i will have to deal with this either way since i am moving over to england in the middle of 2008)?
i suppose i should also ask the question: do i need to pay uk taxes on the us source of income while i am in the uk? it will be us-based work since i will do it online from the uk, paid into a us bank account. i will be paying uk taxes once i have a full-time uk-based job (i have a tier 1 general visa).