OUCH - tax accountant

They want to charge me 500GBP to get my taxes done here. Can I do it myself or am I asking for a huge headache?

SINGLE
student
resident of UK (Getting married to brit and staying here)
Had full time job until July 2005 (worked jan 2005-aug 2005)
worked part time  here, but earned very little (way under 4000)
Have small amount of income from interest (around $100)
Have student loans in US from previous schooling (tax deduction)

Can i just go to the IRS site and download the appropriate form, fill it out, and mail it to London?

Thanks!

You can totally do it yourself. I did mine last year and I'm an absolute moron when it comes to figures and forms. Unless you earn loads of money it's really very straightforward and mostly involves a lot of "0"s. Though I don't know about student loan deductions. Did you itemize that on your 1040 in previous years? Cause that's what you need - the foreign income exemption form (sorry, can't recall the name, but there are loads of threads about it here) and a 1040. Easy peasy.

thank you! I will tell the accountant to bugger off (nicely of course!) and figure this out on my own. I did the student loan deduction before, it's easy.

Thanks!!!

No worries.  My accountant in California charges a fortune so I decided to have a go myself last year and it seems to have worked out fine.

It is not always so easy to decide.  In pittpanther36's case the choice is quite simple.  There is no US tax due so whether a professional is paid or not the return will probably be correct.  There are arguments relating to claiming the lifetime learning credit or itemized deductions for the education costs, but overall these will probably not save US tax.

pittpanther36 needs to make sure that the US interest income is not brought to the UK (to avoid UK tax) and that a claim is made to remain non-UK domiciled.

Where a tax professional can add value is where life gets more complicated such as whether to buy a home in the Brit's name (as against the American spouse); planning Wills for those where only 1 partner is a US citizen, filing foreign bank account forms, remittances to the UK, investing in UK pension plans, avoiding UK investments such as some kinds of ISAs (which give significant US tax problems) etc., etc.

A dual qualified US/UK adviser needs to invest in insurance, computer software and hardware and education.  Some folks do indeed find tax returns are a piece of cake.  For others they are a slice of life ...  i.e. sometimes horrid, but occasionally full of good surprises!

That's the low end of the standard price here.  You can do it yourself, but you won't get the tax planning you need to keep your taxes as low as they are now.

Tips for do-it-yourselfers:

1)  Forms are all at www.irs.gov
2)  TurboTax is easier than doing it yourself, and should cost around $35 - $50.
3)  You can post it either to the Embassy or to Philadelphia.
4)  Don't forget to file Form TD F 90-22.1 if your  bank balances ever exceeded $10,000.
5)  You can pay for tax planning and still do your own tax return.  This is cheaper than paying for both - and far cheaper than paying extra tax in the future due to poor decisions made now.  Do it before you prepare your tax return, in case there's an impact you need to keep in mind.

Other tips:
In your particular case, the US/UK tax treaty may affect your situation since there are special residency rules for students.  You should take advice before claiming the Foreign Earned Income Exclusion and the Foreign Tax Credit, and before preparing any UK tax returns. 

Just a quick comment - I suspect that the student thing will make no difference because to get the student exemption one MUST leave the UK within 2 years of arriving, which is just not the case here.

Unfortunately, US tax advisers in the UK are subject to compulsory client identification rules under UK anti-money laundering law (or face imprisonment if they don't comply).  Folks such as Lizzit will therefore HAVE to spend 30 minutes to an hour just identifying you before giving ANY advice at all.  Add to this all of the costs of running a business, paying for continuing education etc and £500 is definitely at the lower range, just as Lizzit says.

If life is straightforward then do file your own returns, otherwise a consultation with a dual US/UK qualified tax adviser will probably save you heaps of worry!  Just make sure you ask questions about the background and experience and qualifications of your chosen adviser so you know what services are available to you.

You can totally do it yourself. I did mine last year and I'm an absolute moron when it comes to figures and forms. Unless you earn loads of money it's really very straightforward and mostly involves a lot of "0"s. Though I don't know about student loan deductions. Did you itemize that on your 1040 in previous years? Cause that's what you need - the foreign income exemption form (sorry, can't recall the name, but there are loads of threads about it here) and a 1040. Easy peasy.

If you don't mind me asking, did you work in the US and the UK in the same tax year the first year you applied?  Also, if you don't think its too rude, how much did you end up having to pay? (to the US)

If you don't mind me asking, did you work in the US and the UK in the same tax year the first year you applied?  Also, if you don't think its too rude, how much did you end up having to pay? (to the US)

Not rude at all.... The first year I was here I only worked in the US so I did a 1040ez and didn't end up owing anything. Last year I only worked in the UK and filed the foreign income exemption thingy and a 1040. And because I don't come ANYWHERE near the limit of what you can earn and probably never will (I'm not exactly in a high earning profession), I don't anticipate ever owing US taxes. Unless I win the lottery or something! 

Good luck with that Lottery thing Anne!   That's my hope too.  If you win, I'd get your husband to claim it...I don't think they have to pay taxes on lottery winnings in the UK.  We'd still have to fork over half to Uncle Sam. 

Thanks for sharing!  I won't be in a high earning job either

Kind of off topic, but is it just me or does it seem like even jobs that are high paying in the States (lawyer, etc..) are not even close to be high paying in the UK?
I want to go to uni this fall and do a bachelor of laws, and the pay for a solicitor seems low (from what I've researched).  Then again, anything over what I'm expecting to make when I first move there is GREAT!

Kind of off topic, but is it just me or does it seem like even jobs that are high paying in the States (lawyer, etc..) are not even close to be high paying in the UK?

Yes, I think you are right, BUT I find that my money goes further here. I know a lot of people would argue that, but I made more than double in the US what I make here (I switched careers) but I'm better off here. In fact, even if you add my salary to dh's salary I still made more there, but we have a much better life style here than we would if we'd settled in San Francisco....