US taxes

Hello,

I moved to the UK late last year under a Tier 1. In 2010 Only worked in the US therefore did my US taxes.  For 2011 I started working in the England and just learned that I still need to file taxes for the US.   I believe my situation could be quite simple but I am confused as to what I need to do. A colleague of mine used to work with an American and said I probably needed to delay my US tax and then report my earnings from the UK.  Can someone please clarify what my initial steps should be.  I'm a little bit worried as we are approaching April and not sure what to do. Let me know if more information is needed.  I appreciate any help.

Many thanks
Marc

People living abroad get an automatic extension until June, so you have time to figure it out! Best bet is to trawl the board for information, and post about your specific circumstances a bit more so people can offer you advice.

More info and questions and we can help.

First I'd find out your residency status in the UK as this will determine how HMRC taxes you. Here is a useful booklet to help you decide. The flow charts are great

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

Once you know your UK status you will be able to decide if the UK will what to tax any US source income and gains you have as well as the PATE it takes from your UK wages.

For your US taxes you can exclude your UK income or take tax credits for the UK tax you pay

Thanks for the information.  I went through the flow charts and they determined that I was domiciled abroad. More info about me: In 2011 I had all my income (except minimal dividends and capital gains) come from the UK. I earned around 30k GBP and my employer has been withholding PAYE Tax and National Insurance. As of now I have not received any full year end tax report, I only have my pay stubs.

So I guess my questions are:
1) Am I correct in understanding that my tax deadline is automatically extended because I live abroad or would I need to file for an extension?
2) Would I need to complete a US tax filing and a UK tax filing?
3)What paperwork do I need from my employer to start filing my taxes or can I start now?
4) What questions am I missing?  I know there must be plenty.

Thanks for all the help. 

Are you resident and ordinarily resident? Do you have any pension or investments in either the US or the UK.

1) If you live outside the US you get a filing extension to June 15th.
2) As you do PAYE and earn 30kGBP a year you probably don't need to do a UK self assessment unless you have income or gains from the US.
3) I don't now about UK paperwork, your pay stubs would be a good place to start. Do you get a summary of your annual income in the UK like the W-2 in the US? You should be able to exclude all your UK income from US taxation using the Foreign Earned Income Exclusion.
4) There are an infinite number of questions, just like monkeys.

(3)You'll get a P60 from your employer sometime after April 5th, (U.K equivalent of a W-2). Unfortunately, as U.K/U.S tax years are incompatible, you'll need to ascertain income directly from paystubs to December 31st 2011.

Thanks for the info.  I'll make sure to look out for the P60 form and gather my Dec 31st paystub. At that point it seems I can already start working on my taxes.  In the past I've used Turbo Tax and other similar online tools.  Is that still possible living abroad and earning foreign income or would those sites not be recommended?

I hear that TaxACT is useful too.

You can, but honestly, I find it easier to do by hand. The tax software makes assumptions and has you fill out sections that are irrelevant and unnecessary, and sometimes it won't let you proceed without filling them in. I spent a couple of hours trying to cope with various e-filing methods, then eventually gave up in frustration and completed my 1040 by hand in 10 minutes.

You can, but honestly, I find it easier to do by hand. The tax software makes assumptions and has you fill out sections that are irrelevant and unnecessary, and sometimes it won't let you proceed without filling them in. I spent a couple of hours trying to cope with various e-filing methods, then eventually gave up in frustration and completed my 1040 by hand in 10 minutes.

+1

You also learn the various ways to accomplish a return, and the impact each different way has on the return. This knowledge can be valuable in handling day to day financial decisions in the future.

You can, but honestly, I find it easier to do by hand. The tax software makes assumptions and has you fill out sections that are irrelevant and unnecessary, and sometimes it won't let you proceed without filling them in. I spent a couple of hours trying to cope with various e-filing methods, then eventually gave up in frustration and completed my 1040 by hand in 10 minutes.

I'd take a middle path between online and "pencil". Use the downloaded/CD version of TurboTax rather than the online version. This will give you full access to the forms and you can manipulate them quite easily.

Editable pdfs can be downloaded from the IRS website directly, so no need for any tax software.