Brit living in the US but paid in GBP in the UK - where do I pay tax?

[russlear]

Can anyone help?

I have just moved to the USA after marrying my wife who is from Dallas. Whilst in the UK I was working for a hotel selling to the US Market and as I was moving here the hotel has asked me to stay on, currently they pay me in GBP into my UK bank account, they do not have a US division or bank so cannot pay me into a bank account here in the US.

So the big question... How do I go about the taxes? If I am payed in the UK do I have to pay tax there and here in the US? - I have a P85 from the tax office in the UK to fill in but get the impression if I am paid in the Uk I still have to pay tax there even though i will not be a resident and will definately not be there for longer than the 183 days or whatever or be staying on any trips for longer than 90 days.

I assume as I am married, living and working in the US I will have to pay taxes here but in the USA but as I ahve no employer to make any deductions on a regular basis does this mean I would have to be self employed and therefore pay additional Self Employment Taxes..............

My brain is spinning right now!!!!!!!!!!!!!!

[Bevdeforges]

From the US side of things, you are working in the US and subject to US taxation. Because you're working for an overseas company that does not have a payroll presence in the US, you should be billing them for your work and not only paying self employment taxes (i.e. social security) but also making quarterly estimated tax payments.

I have heard that the UK recently changed some of their tax rules to extend taxation to some folks in situations like yours. Not sure of the details, but there is a tax treaty between the US and UK that is supposed to avoid double taxation. Chances are, if you're resident in the US, it's the US IRS that you should be paying your taxes to.

For those who work as "independent contractors" (like you are doing now), it is normally considered appropriate for the previous employer to raise the rate of pay by a reasonable amount in order to cover the additional taxes (employer's portion of taxes and social security) and the administrative costs of having to do one's own "payroll" and accounting work. You may want to find an accountant or enrolled agent to advise you here.
Cheers,
Bev