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Topic: I have no clue what to file (Me-USC, Wife-UKC)  (Read 1027 times)

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I have no clue what to file (Me-USC, Wife-UKC)
« on: April 23, 2018, 07:37:21 PM »
So I have absolutely no clue how I am supposed to file my taxes this year and moving forward.  I am a United States citizen who is currently living in the US.  My wife (we got married earlier this month in the US) is a citizen of the United Kingdom who currently lives in the UK.

We just sent my spousal settlement visa off and are waiting for the decision from UKVI.  I have worked the past several years while in school for the same company though I am technically not an employee (I am self-employed, get a 1099-MISC whenver my boss does his taxes for the year).  I have been working and will continue to work for approximately another month in the US before moving to the UK to be with my wife. 

My wife works full-time as a teacher, and I do not have a job lined up when I first get over in the UK. I will be self-employed when I first come over,f touching up my wife's family's rental properties (painting, pressure washing, repairs, etc.) until I find a job.

How do I file my taxes for this year?  Do I file "married filing separately" for the US?

What will I file as for the money that I make in the UK?  Do I file taxes with both the US and the UK?  If so do I continue filing both US and UK taxes even after this year (though I will not be living in the US)?

I have no clue what to do.   


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #1 on: April 23, 2018, 07:42:58 PM »
You will file tax returns in both countries plus any required information returns in the United States.


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #2 on: April 23, 2018, 08:39:40 PM »
You will file tax returns in both countries plus any required information returns in the United States.

What is a required information return?


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #3 on: April 23, 2018, 08:41:40 PM »
What is a required information return?

Read up on FBAR.


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #4 on: April 23, 2018, 09:47:46 PM »
On the good side, there are a lot of people on this board who will help you.  On the bad side, you're going to get stuck juggling the IRS and HMRC, and non-simultaneous tax years.  IRS directions are entirely more thorough, but the HMRC seems more humane (so far).

Definitely read up on FBAR. This also might be of use.  https://www.americansabroad.org/us-taxes-abroad-for-dummies-update/

Don't forget about the Affordable Care Act. Little-known fact - if your income is low enough, you are exempt from having to comply with it. If you're not going to have much income, you might check out that exemption. https://www.healthcare.gov/health-coverage-exemptions/exemptions-from-the-fee/

Congratulations on the marriage!
« Last Edit: April 23, 2018, 09:55:04 PM by Nan D. »


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #5 on: April 24, 2018, 02:59:07 PM »
You will file tax returns in both countries plus any required information returns in the United States.

So am I having to pay taxes for both the US and UK?  Meaning I pay twice and get to keep even less than just paying one country?


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #6 on: April 24, 2018, 03:06:28 PM »
So am I having to pay taxes for both the US and UK?  Meaning I pay twice and get to keep even less than just paying one country?

Highly unlikely.  For the most part, tax treaties to avoid double taxation are in place.


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #7 on: April 24, 2018, 03:13:44 PM »
Highly unlikely.  For the most part, tax treaties to avoid double taxation are in place.

Do you have any resources for me to read up on so that I can get a better grasp of what I need to be doing?  Someone mentioned reading up on FBAR but I've been reading some on the IRS website and have no clue what it entails and how I should go about that.

If anyone could provide links to taxes for US expats in the UK I would appreciate it. 


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #8 on: April 24, 2018, 03:47:15 PM »
A US citizen is always a resident of the United States. US filing continues each year just as if one is in the United States (including FBARs if required). The United States gives a credit for UK tax.


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #9 on: April 24, 2018, 08:02:23 PM »
So am I having to pay taxes for both the US and UK?  Meaning I pay twice and get to keep even less than just paying one country?

Yes and no. You will pay tax in the UK as that will be your tax home. You will also have to file a tax return every year with the IRS.  If you play the timing correctly (and I'm still not entirely clear on it) you will be able to take tax paid to the HMRC off your USA taxes. Since the UK has a higher tax rate, you'll ~probably~ eventually end up only out of pocket to the HMRC.

You can ask some of the others to explain the first year problems with making sure you are not going to be taxed twice - when to pay taxes to the UK and how to claim them back. [Apparently if you do not make a payment in calendar year 2018 on the taxes you'll have to pay HMRC for the 2018/19 tax year, you can't claim the tax back for the 2018 portion of that year on your 2018 IRS return.  There are other mechanisms (form 1116) that might allow you to do that by claiming a foreign tax credit.  I did this tutorial https://apps.irs.gov/app/vita/content/0507/0507_00_010.jsp?level=puertorico  as kind of a general primer. ]

You can elect a "split year" on your HMRC tax forms and any income you had from the USA prior to the date you become a tax resident (when the tax year splits) will not be taxed by HMRC.

« Last Edit: April 24, 2018, 08:08:46 PM by Nan D. »


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #10 on: May 11, 2018, 03:30:38 PM »
I am technically self employed, am I still able to fill in the US as married filing seperately?  By the time I leave the US this year I will likely have made less than $10,000 (thanks to bad weather, slow work, etc.).  I am used to paying 33% of my earnings in taxes, but will I get to pay less taxes now that I am married?  Does my wife (who is a UK citizen and only works in the UK) need to file with the IRS?


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #11 on: May 12, 2018, 05:20:13 PM »
I believe that you have the option of filing as married filing separately. That keeps your wife out of the clutches of the IRS. Unless she has a greencard or is a US citizen, or was working in the USA, she needn't be dealing with the IRS at all, is the way I understand things.

Someone will eventually come along here and verify that, or else give you better info.


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Re: I have no clue what to file (Me-USC, Wife-UKC)
« Reply #12 on: May 13, 2018, 08:19:35 AM »
This is very basic info - I am not a tax professional, and anything I say is subject to correction.

Unless your wife has US source income, or is a citizen or green card holder, your best option is married filing separately (of that I AM sure).

If you work as a self-employed subcontractor once in the UK, you will need to register as self-employed, and you will pay NI contributions and tax on your earnings. You will need a National Insurance number, and when you register with HMRC as self-employed, you will also get  UTR (your taxpayer number here in the UK).

You need to read up a bit on a few things. For example, in the US you would typically file a Schedule C as self-employed, and also pay SE tax. Because of the 'Totalization Agreement', you will no longer be liable for SE tax in the US when you pay NI contributions in the UK.

The first year (2018 for you) is the most complicated. After you have been resident here for the required time period, you can take the Federal Tax Credit or the FEIE (whichever is appropriate) to avoid double taxation.

Once resident here, you do get an automatic extension to file your US tax return, but any tax due must still be paid by the normal April 15th deadline.

FBAR only comes into play when you have signature authority on a foreign account or have foreign financial accounts in your name. That's an on-line only filing for the Treasury Department, and not part of your 1040. It's simple to do, and depending on your circumstances, may not be necessary. It only comes into play if the aggregate value of all accounts reaches $10,000 at any point during the year. You might need to file for 2018 if you transfer a lot of $ to the UK, for example.

Read now while you have the time, formulate questions, and post. Someone with WAY more knowledge than I ever will have will come along and provide answers.
Married December 1992 (my 'old flame' whom I first met in the mid-70s)
1st move to UK - 1993 (Letter of Consent granted at British Embassy in Washington DC)
ILR - 1994 (1 year later - no fee way back then!)
Back to US in 2000
Returned to UK July 2011 (Spousal Visa/KOL endorsement)
ILR - September 2011
Application for naturalization submitted July 2014
Approval received 15-10-14; ceremony scheduled for 10 November!
Passport arrived 25 November 2014. Finally done!


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