Working for a UK company remotely while in the USA

[motropuk]

Hi

I am thinking of moving to the US with my wife, who is a US citizen, in a couple of years. There might be the possibility of continuing work for the company I currently work for here in the UK but just remotely (USA).

Does anyone know how I would stand legally with this. If the money was paid into my US account they I assume that I would just have to declare it at the end of the year. I guess this would mean I got taxed twice both in the UK and then in the US.

However, if it can only be paid into my UK account and then wired etc how do I stand then.

Thanks

[Bevdeforges]

It doesn't matter where you are paid, only where you do the work.

If you are resident in the US with your wife, you will be subject to US income tax on your worldwide income. Once you have established residency outside of the UK (which I believe requires 183 days in the UK tax year spent outside the UK), you are not supposed to be subject to UK income taxes anymore, unless you have non-salary type income that comes from the UK. (But you would be paying UK taxes as a non-resident.)

Obviously, this really complicates things for an UK employer. Usually, for an arrangement like this, the UK employer would put the remote employee on a contract basis. You wouldn't be considered an "employee" but rather a contractor. (Sort of like being in business for yourself.) That makes you responsible for paying the appropriate taxes and social security amounts to the US government on your own, usually through quarterly estimated payments.

The other option is to put you on the US payroll - assuming your employer has an office somewhere in the US that could make the appropriate withholdings from your check for you.
Cheers,
Bev

[synthia]

It also depends on whether you are covered by a tax treaty. For instance, a friend was transferred to Germany, but was paid by the US company under a tax treaty which exempted them from German taxes and taxed him as if he were working in the US. This was good for him, as the US tax rates were much lower.

[motropuk]

Thank you for all the advice

[Bevdeforges]

Just one caution on a couple of the ideas presented so far...

The overseas earned income exclusion (form 2555) requires that you have either physical presence outside the US for 330 consecutive days, or can show "bona fide residence" outside the US for an entire tax year (i.e. a calendar year). If you're living in the US with your wife, no can do, no matter where your paycheck comes from.

The tax treaty provisions are really for those living "temporarily" in the US (say, for 3 to 5 years) with intention to return to their home country. For that reason, there is an interest in maintaining their eligibility in their home country social security system (i.e. health insurance and retirement benefits) - and indeed they have to continue paying in to the system in their home country to fall under the treaty benefits. Paying into the NHS in the UK does you no good while you're living in the US, as there is no reciprocal US national health care system. You'll have to pay for some other form of health insurance (or get insurance through your wife's plan). Why pay twice?

You also want to consider how your visa status will affect your tax options. If you go to the US on a green card, you have to file in the US as a resident, and it's usually much more advantageous to file jointly with your spouse.
Cheers,
Bev