USA/UK tax preparer??

Hi All,

Sorry if this has been asked before but we are having such a hard time. My retired in-laws have moved back to the UK after many years in the US. They have pension and social security income back in the US and need to file self-assessment here in the UK for the first time ever and going forward. And of course, always file their US taxes.

We are having the hardest time finding a consultant that does both US and UK tax preparation that is not a big corporation that usually handles millionaires.

They are just a couple of old people with some pension income and social security and some IRA income. Our last quote was for almost £5000 including VAT. That's a huge chunk of their yearly income for gawds sake!!!!

Any recommendations?

Thanks so much.

Can they not manage it themselves? If all they have is pension and SS income...?

Have a look at some suggestions here

https://talk.uk-yankee.com/index.php?topic=97064.0

Durhamlad-

Thanks so much for the list. The quote that we got for £5000 was actually from one of the businesses on the list.

You mention Greenback as a backup but I believe they only do US taxes, if I'm not mistaken. Would it be unwise especially this first year when my in-laws have paid taxes in the US and will be getting a "foreign tax credit" for those taxes paid to have one company do the US and another do the UK.

To simplify the question. Do most people have one person perhaps in the USA prepare those taxes and another in the UK do the self-assessment?

Thanks

It sounds like they could do with someone doing their taxes this first year.  You don't mention their citizenship status, which will affect how they are taxed.  They should not have been paying any UK tax for income prior to their arriving in the country, and once here they should not be paying any US tax on their Social Security as the treaty states that SS should be taxed only in the UK. (reported on the IRS return but zero of it taxable)

Thanks Durhamlad,

Yes they are both dual citizens so should have been paying the social security over here. Thats one of the issues we need to straighten out this first year for sure.

Thanks Durhamlad,

Yes they are both dual citizens so should have been paying the social security over here. Thats one of the issues we need to straighten out this first year for sure.

Even as dual citizens, like myself and my wife, once back in the UK they should not be liable for tax on SS in the USA, just in the UK.

My wife and I are in the process of instructing a tax advisor.  She arrived on a spousal visa last June and I am a UK national.

A colleague used to use US Global Tax (which is on your the list Durhamlad pointed you to) and was happy with them. They do both US and UK tax returns. I contacted them and was quoted £800 plus VAT for a federal return, £350 plus VAT for a state tax return and £550 plus VAT for the UK return.

As my wife's salary is low (and was reduced considerably when her employer switched her from being paid by the US office to the UK office) this was too expensive.

So we looked at Greenback who seemed reasonable. You are correct that they only do US taxes but they work with a UK tax advisor and you can find out details of her prices here:

https://www.greenbacktaxservices.com/partners/uk-self-assessment-tax-return/?utm_source=internal&utm_medium=email&utm_campaign=greenback_csc,

In the end,however, we have decided to go with another recommendation, Olivier Wagner at 1040 Abroad.

https://1040abroad.com/blog/author/olivier/.

He is based in Canada but seems to know his stuff. His fees were 400 CAD for the federal return, 100 CAD for the State, and 100 CAD for an FBAR return. We had a 20 minute video consultation with him and he is clearly knowledgable. His TrustPilot scores seem pretty good too.  I do not think he gets involved with UK tax returns but hopefully I will be able to manage that.

My wife and I are in the process of instructing a tax advisor.  She arrived on a spousal visa last June and I am a UK national.

A colleague used to use US Global Tax (which is on your the list Durhamlad pointed you to) and was happy with them. They do both US and UK tax returns. I contacted them and was quoted £800 plus VAT for a federal return, £350 plus VAT for a state tax return and £550 plus VAT for the UK return.

As my wife's salary is low (and was reduced considerably when her employer switched her from being paid by the US office to the UK office) this was too expensive.

So we looked at Greenback who seemed reasonable. You are correct that they only do US taxes but they work with a UK tax advisor and you can find out details of her prices here:

https://www.greenbacktaxservices.com/partners/uk-self-assessment-tax-return/?utm_source=internal&utm_medium=email&utm_campaign=greenback_csc,

In the end,however, we have decided to go with another recommendation, Olivier Wagner at 1040 Abroad.

https://1040abroad.com/blog/author/olivier/.

He is based in Canada but seems to know his stuff. His fees were 400 CAD for the federal return, 100 CAD for the State, and 100 CAD for an FBAR return. We had a 20 minute video consultation with him and he is clearly knowledgable. His TrustPilot scores seem pretty good too.  I do not think he gets involved with UK tax returns but hopefully I will be able to manage that.

Golden Rules for choosing a great tax professional when in the UK:
1. QUALIFICATIONS
Do not be shy! Ask if they are members of professional bodies in both the US and UK and if so, which ones and for how long. [Only a small number are dually qualified, which is 100% essential.]
2. COST
Ask what they charge!
3. COMFORT
Pick one who is dually US/UK qualified (so you know that the tax preparer is regulated in both the US and the UK) and who you feel you can get on with. This is a personal choice so call a few firms before deciding...

Golden Rules for choosing a great tax professional when in the UK:
1. QUALIFICATIONS
Do not be shy! Ask if they are members of professional bodies in both the US and UK and if so, which ones and for how long. [Only a small number are dually qualified, which is 100% essential.]
2. COST
Ask what they charge!
3. COMFORT
Pick one who is dually US/UK qualified (so you know that the tax preparer is regulated in both the US and the UK) and who you feel you can get on with. This is a personal choice so call a few firms before deciding...

Could you please clarify why you say it is 100% essential to use a dually qualified person? The enquiries I have made are that this will cost several thousands of pounds. If the relevant  income is low, in our case about £20,000 that seems very hard to justify.

Bilbo-
Thanks so much for your reply. Our concern is setting them up correctly this first year of dual filing. And yes they don’t have lots of income.
To review they have mistakenly paid taxes on Social Security and IRA income on the US side.

Here is the question or questions it seems.
1- Which do we file first and does it matter? Do we have to file say …. The UK… so that the US knows somehow they have paid taxes in UK with a code or something?

2-Or do these two not talk to each other? You file your US and in the paperwork you say “hey I paid you guys this money but I live in the UK now and I actually owe this money to them now. So I’m gonna pay them and it would be great if you gave me all this money back. Thanks” ?

Big question is how does the US know we have paid taxes in UK? And how do we get the money back from the US?

Bilbo-
Thanks so much for your reply. Our concern is setting them up correctly this first year of dual filing. And yes they don’t have lots of income.
To review they have mistakenly paid taxes on Social Security and IRA income on the US side.

Here is the question or questions it seems.
1- Which do we file first and does it matter? Do we have to file say …. The UK… so that the US knows somehow they have paid taxes in UK with a code or something?

2-Or do these two not talk to each other? You file your US and in the paperwork you say “hey I paid you guys this money but I live in the UK now and I actually owe this money to them now. So I’m gonna pay them and it would be great if you gave me all this money back. Thanks” ?

Big question is how does the US know we have paid taxes in UK? And how do we get the money back from the US?

HMRC and IRS don’t communicate to sort things out, it is all up to the filer. It doesn’t really matter which order the filing goes but the way it works for me is that I file my US taxes first but I know how much HMRC tax will be due because I essentially have that return ready to go. In May this year (2024) I will know how much UK tax I am going to pay for tax year 2023/24 and I file my US tax return for 2023 in May. I will file  my UK return later in the year and pay the UK taxes before the end of the year even though I have until the end of January 2025 to pay.

When filing the US return I use the foreign tax credit forms 1116 to claim the tax paid in the UK on the same income that the IRS  is going to be taxing. The completed IRS form 1040 then shows the tax due on the income declared, and subtracts the foreign tax credits for the taxes to be paid to the UK.

I hope that makes some sense.

Durhamlad-
Thanks so much. Huge help.

I think in their case it would be best to prepare/file the UK first so we could do as you do and know how much tax they will be paying on the UK side. This way they can follow your advice and do as you advised on form 1116 and 1040.

Really appreciate all the advice.

Nwkh

Hi again

I asked a similar question during our initial consultation.

In our case there my wife will have liability to pay UK tax for 2023/24 for the period June 2023 (when she arrived) to April 2024. However, as I understand it there the norm is for the US tax return to be submitted in every April. So the question was how can she claim an offset against her US tax liability when her tax return for 2023/24 was not yet due?

One way to do it seems to be as durhamlad suggested which is to calculate your UK tax liability in advance of submitting your US tax return. However, as for us this is a bit messy, so I think we are going down the  automatic extension route for filing the US tax return. I believe there is an automatic two-month extension to file a Federal Tax Return for expats which moves the expat tax deadline to June 15 and that if necessary, you can request a further extension to October 15 or December 15.

That will enable us to file the UK tax return first followed by the US tax return in which we will claim the foreign tax credit in respect of the UK tax already paid.

Hi again

I asked a similar question during our initial consultation.

In our case there my wife will have liability to pay UK tax for 2023/24 for the period June 2023 (when she arrived) to April 2024. However, as I understand it there the norm is for the US tax return to be submitted in every April. So the question was how can she claim an offset against her US tax liability when her tax return for 2023/24 was not yet due?

One way to do it seems to be as durhamlad suggested which is to calculate your UK tax liability in advance of submitting your US tax return. However, as for us this is a bit messy, so I think we are going down the  automatic extension route for filing the US tax return. I believe there is an automatic two-month extension to file a Federal Tax Return for expats which moves the expat tax deadline to June 15 and that if necessary, you can request a further extension to October 15 or December 15.

That will enable us to file the UK tax return first followed by the US tax return in which we will claim the foreign tax credit in respect of the UK tax already paid.

The first year would be a good time to file for an extension.

Our son returned in September 2017 and the following year he filed for extension to October 15 to give him time to make 330 days residency in the UK so he could file form FEIE to exclude his UK earnings.

When you file for an extension make sure you send enough money to cover your taxes otherwise you will be subject to an underpayment penalty.