Quote:
Originally Posted by Bevdeforges
Actually, no, your thinking on this is not correct. Your tax residence determines where and to whom you pay your taxes. In your case, you are still resident in the US, so you continue to pay US income tax. In order to exempt any of your income from US taxation, you would have to be resident in the UK for an entire year (tax/calendar year or 360 consecutive days).
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Kind of. There's no 360-day rule.
To be more specific, you can exempt up to $85,700 from federal income taxes if that money is earned while you are overseas and you meet either one of the following requirements:
(A) You are out of the USA for at least 330 days out of one or more overlapping 12-month periods that, taken together, cover the tax year in question. This is called the Physical Presence Test; it can be confusing at first and it's definitely worth reading Publication 54 carefully. In the simplest case, if you are out of the USA for at least 330 days of a calendar year, then you're eligible to take the $85k exclusion.
(B) You can demonstrate "Bona Fide" residency in some other country. That would mean you have residency papers, a home, a job, and so on. There's no specific set of criteria; if you are called on it, it's up to you to make the case to the IRS with whatever documentation you have. If you don't have legal right to work in the UK then it's almost certain you will not be able to use this approach.
And to George:
If you are engaged in work activity which would oblige you to pay taxes in the UK, then you will absolutely need to have a compatible visa. You cannot enter as a visitor and then proceed to work and get paid by a British company. Doing so would put you at risk of exclusion or deportation, which would throw a major wrench into your long-term plans.
I am surprised your employer is willing to go along with this, as they have legal exposure as well.
You should first determine the standing of your spouse visa, since that has the potential to provide the easiest solution.