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Topic: Visiting the US and tax liability  (Read 1225 times)

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Visiting the US and tax liability
« on: August 21, 2014, 02:18:17 PM »
So, I live and work in the UK with my British husband, and have done for a couple years. I file my tax return in the US, but I don't pay anything on the money I earn over here, as the amount falls under the threshold. However, I have an elderly parent in not the best health, and need to spend some time with them in the US. I was planning on a two month trip, but will this cause me to owe taxes on my UK income because I'll be in America too long? Can anything be done about this? I know dishonesty is not good, but how do the powers that be know you're in the US? I lived in Saudi for a few years and they didn't ask for copies of passport stamps or anything like that when I filed as tax-exempt...just don't know what to do, and I really wish to spend some time with my sick parent but I don't want to have to write a big, fat check to the IRS. Any advice is very appreciated.


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Re: Visiting the US and tax liability
« Reply #1 on: August 21, 2014, 03:53:26 PM »
Hello :)

Fortunately there are a few ways around the 35 days in the US (AKA the Physical Presence Test). For one, depending on how long you have been living in the UK and your ties there, you may just qualify as a Bona Fide Resident. If you qualify as a Bona Fide Resident, you do not need to worry about the exact number of days in the US, and you can still use the Foreign Earned Income Exclusion.

For more information on how to qualify as a Bona Fide resident, watch this video: http://www.greenbacktaxservices.com/blog/qualifying-as-a-bona-fide-resident/

The second option you have is to use a Foreign Tax Credit. With the Foreign Tax Credit (FTC) you can get a dollar for dollar credit for all foreign taxes paid. As the tax rates in the UK are higher that what you would pay in the US, the FTC should more than cover any US tax liability.

More information can be found at: http://www.greenbacktaxservices.com/blog/expat-taxes-explained-series-foreign-tax-credit-form/

I hope this helps and good luck!
Expert US Expat Tax Preparation. Simplified. Resolved. Designed to save you time and money.


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Re: Visiting the US and tax liability
« Reply #2 on: August 21, 2014, 04:06:30 PM »
Your worldwide income is reportable in any case, as you already know. I wouldn't use the phrase "tax exempt"......you're not 'exempt' from tax because you live abroad. You may not owe any US tax due to low income (below filing threshold), the foreign earned income exclusion or use of foreign tax credits to offset any US liability.

If you've lived here for a couple of years, you likely meet the bona fide resident test.

You meet the physical presence test if you are physically present in a foreign country or countries 330 full days during a period of 12 consecutive months. See: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion---Physical-Presence-Test
Married December 1992 (my 'old flame' whom I first met in the mid-70s)
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Back to US in 2000
Returned to UK July 2011 (Spousal Visa/KOL endorsement)
ILR - September 2011
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Re: Visiting the US and tax liability
« Reply #3 on: August 21, 2014, 04:09:27 PM »
Thank you both for the info- I will watch these videos at home tonight for a better idea of how things work. And yes, you're right- I'm not 'exempt', I just haven't owed due to earning below the maximum.


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Re: Visiting the US and tax liability
« Reply #4 on: August 21, 2014, 10:09:07 PM »
As others have said you can still claim foreign tax credits or the foreign earned income exclusion. Your only risk is that you end up spending too long in a State that has an income tax that makes you resident for State purposes, if you are not already.


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