Reporting UK income twice? UK vs US tax years

Hi all.

I’m a self-employed, UK resident. Both UK and US citizenship, but have lived and worked in the UK all my life. Therefore I’m filing US taxes to remain compliant, and am up to date with both the UK and US via accountants.


Here’s my query:

A US Tax accountant has been preparing my US returns for the past few years, based on the information in my UK self assessments.

For the 2014 US tax return, he used the figures from my 2014/15 return.

For the 2013 US tax return, he used the figures from my 2013/14 reutrn. And so on.

Last year in early 2015 I left to go travelling. I did a very small amount of work at the start of the year in Feb, totalling around £2,000 gross.

This was of course included on my UK tax return for 2014/15.

This return has been used in full, for my 2014 return, including the £2,000 mentioned, and the UK taxes paid on it.

After this, I have not earned any income, (closed down my self-employment as of end of 2014/15 tax year), and will not be required to file a self assessment for 2015/16 - confirmed by HMRC.

So my question is: Do I need to file a US tax return for 2015? That small amount of money in the the UK in Feb has already been declared to the IRS on the US return, as it was included in the 2014/15 UK return.

Obviously I would love to not have to declare it twice :-)

I know that this small amount won’t incur US tax, but I’d very much like to avoid paying for an accountant to complete another US return.

Any thoughts on this would be great to hear.

Thanks in advance.

I think the short answer is yes, you earned the income in 2015 so it should be declared on your 2015 US tax return. Sounds like your current accountant has taken a 'pragmatic approach' for earlier years and has soothed out the differences in the tax years -which probably isn't strictly correct, but where someone has similar income year-in year-out would probably make no difference. A problem comes round when the income source ends as is the case here - though as you've mentioned the amounts we're looking at here wouldn't make any material difference. 

Of course, you could choose to continue that 'pragmatic approach' for 2015 too...

This isn't directly connected with your question, but have you made sure that your US accountant is exempting you from US self employment tax?

Hi nun,

My US return shows "exempt - see statement" for the self employment tax entry, and he's attached a statement referring to the UK / US totalization agreement.

Hi nun,

My US return shows "exempt - see statement" for the self employment tax entry, and he's attached a statement referring to the UK / US totalization agreement.

Excellent! Some US accountants are a bit myopic, but it looks like you have one who sees the bigger picture.