Us citizen moving to Uk .Tax query.

My us wife is joining me in the uk. She has just transferred within her company. What happens with paying taxes? Does she have to pay on both sides if the pond? Were a little lost.

Thanks

As I understand it, all US citizens living abroad must US file taxes each year, even if they have been out of the US for the whole time. However, I think it depends on how much she will be earning in the UK as to whether she will actually have to pay any US taxes.

She will most likely be paying UK taxes anyway if the company is located in the UK and paying her in UK pounds, but I believe that she only needs to pay US taxes if her UK income is above the equivalent of $85,000 (or somewhere thereabouts).

Hopefully someone with more info on paying US and/or UK taxes will be able to answer in more depth .

The US foreign income tax exclusion covers the first $87,400 (increasing to $91,400) equivalent dollars income, (not including dividends, interest and other income aside from wages.) File IRS Form 2555.

In addition, she can also exclude an additional amount for foreign housing exclusion or deduction. There's a formula on www.irs.gov.

Your wife still has to file each year, even if she owes nothing to the US.