Just moved here - need some tax advice!

I'm American and I married my British husband in July. In August, I packed up and moved here to the UK.

I registered with a temp agency in October and worked for them for 8 weeks. In that time, I earned 1,720 pounds. I don't have a National Insurance number yet as the temp agency gave me a temporary one for their use only. Since then, I have not done any more work. My husband is a teacher and his taxes are filed by his employer. My dad in the US always did my taxes for me every year, and now I have no idea what I should or shouldn't be doing. I know taxes were taken out of my paychecks here. Do I file here? Do I file in the US??

Also, I FINALLY managed to open a bank account here. I read an article somewhere that said I have report my new bank account? Is this right? I've basically been keeping both my US and UK bank accounts going at the same time. I also haven't changed my name in the US at all. So, I haven't notified Social Security or Voter Registration of any changes either.

What now?? I'm so confused!! Help!

1)  UK returns are Apr-Apr.  You may file for 05/06 year end for any refund of PAYE withheld.  The site is www.hmrc.gov.uk.  Unlike the US, you do not have to file if you do not owe any money and are not expecting a refund; provided of course that they did not request you file. 

2)  US returns are required Jan-Dec.  You should file either August 2006 or January 2007 since you moved to the UK.  There is a special extension to allow you to file late at http://www.irs.gov/pub/irs-pdf/f2350.pdf.  You are taxed on your worldwide income.  While you must report your income in the UK, you can exempt it from tax using Form 2555.  Thus, your US return is harder than before.  Since your income in the UK is less than $80,000 per year, you may wish to use a cheaper option for tax-prep, such as a US-based tax-prep firm.  Get a second opinion if (a) they say you owe tax, (b) they do not include your UK income, or (c) they do not include Forms 2555 or 1116 or both.  You should consider getting international tax advice as your financial circumstances get better, as you do not want to expose yourself to a lot of unnecessary excess US & UK tax.

3)  The bank report is Form TD F 90-22.1.  You must file this form for each year you have access to a non-US bank account or securities account where the balances ever exceeded $10,000 at any point during the year.  Access includes (a) your own account, (b) joint accounts, and (c) accounts over which you have signature authority, but do not necessarily own the underlying assets - such as a minor's account, an elderly relative's account, an account at your place of employment, or an account through a charity such as a church.  It's available at http://www.irs.gov/pub/irs-pdf/f9022-1.pdf.

im in the same boat. You say we can exempt our uk earnings if less than 80k by using a form 2555? is this a us form I take it? my w2 just came in the post today from america and we are waiting on my husbands as well so that we can e file it on line? do we need to have a preparer do this since it requires a form 2555?
thanks!

jonie,

In your particular case, yes, could file online - it's a US Form 1040 (long form) with a Form 2555 or 2555EZ attached.  Turbotax can handle this return.  You also need Form TD F 90-22.1 for US bank accounts, which if it isn't part of your online form-filing package, it can be found on the IRS website.  TD F 90-22.1 is only required if your bank balances in foreign bank accounts ever exceeded $10,000.

thanks so much!

Yes, thank you!

Just to add - if you make less than £4000 in a year in the UK you should be eligible to get a refund of all taxes witheld!  I am expecting a £400 refund check any minute!  Worth filing out the paperwork.

How do I apply for for this? Have I missed the deadline?

Liz -

question re: the $10,000 figure on bank accounts.  Does that apply for any time during the tax year (ie between jan 1 2005 and Dec 31st 2005) or at any time since I have had access to the account (think we added me to his account in October 2005)?

It is for any time during the tax year.

I have a question related to all this. I started working in the UK at the end of April 05. Subsequently I have also transferred into my UK bank acct occasional funds from the States or made cash deposits of money accessed from my US bank acct via ATM. My salary earnings here fall under the PAYE system, but evidently I have to do self-assessment on the money I bring over from the States. I realise I have to get a British tax advisor to help with this, but when do I actually owe taxes for 2005 on my funds transferred over from the US?  --Austin

do I have some sort of residency requirements before I can use the form 2555? I just tried turbo tax and it said that since i wasnt in the uk prior to 2005 that I couldnt exclude my uk income???
someone please help, i havent submitted my return yet cause it said there were errors??

ok this is straight off the irs website


13.3 Aliens and U.S. Citizens Living Abroad: Foreign Income & Foreign Income Exclusion

What is foreign earned income? Is it income from a foreign source or income paid by a U.S. company while living abroad?
Earned income is pay for personal services performed, such as wages, salaries, or professional fees. Foreign earned income is income you receive for services you perform in a foreign country during a period when your tax home is in a foreign country and during which time you meet either the bona fide residence test or the physical presence test. It does not matter whether earned income is paid by a U.S. employer or a foreign employer. Foreign earned income does not include the following amounts.

The previously excluded value of meals and lodging furnished for the convenience of your employer.
Pension or annuity payments including social security benefits.
Payments by the U.S. Government, or any U.S. government agency or instrumentality, to its employees.
Amounts included in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualifying annuity contract.
Recaptured unallowable moving expenses
Payments received after the end of the tax year following the tax year in which you performed the services that earned the income.


given these highlighted bits, since I only lived in the uk from june 05 onwards and dont seem to be a bona fide resident? does this mean i dont have foreign income??? im soooo confused! ?

You have foreign income (phew!); it is just that you don't yet qualify to file for 2005 because you don't yet have a quslifying period to claim the physical presence test because you have not been overseas for at least 330 days yet!

que the Etta James music....At Laaaaastttt,,,,,,
THANKS so much!!!!