[sopstjohn]

Hello!
I am a green card holder moving in the US in the next few days. I am working in London for a UK Company and they offered to retain my services as a contractor and work remotely from New York for a few months. I only have a few days to decide what my options are and I need to understand the tax implications of this opportunity.

If anyone has been in this situation before I would appreciate your opinion on a few questions:
- Although I will no longer be a UK resident when working in the US, can I set up an umbrella or limited company in the UK and use it to invoice my UK client?
- I understand that I have to pay taxes in the US as I will be a US resident doing work in the US. Can I avoid paying tax in the UK and only pay tax in the US if I set up a UK Limited Company?
- The other option seems to set up a business in the US. I am hoping to avoid this as it seems to be the most painful in terms of paperwork but if I have to go down that route, do you know where I should start and how long it takes?

Thanks in advance
Sophie

 

[Bevdeforges]

You have a number of options - at least from the US side.

There is no reason you HAVE to set up a UK company to bill your customer in the UK. You can bill from the US - and even bill in sterling if you wish. You may not need to set up a US company, either, depending on the sort of work you're doing and the amounts you'll be billing. It complicates your tax forms a little bit, but you can report your business activities as a "sole proprietorship" on your personal income tax forms. You may want to talk to an accountant or enrolled agent in the US to set up the accounting side of this arrangement.
Cheers,
Bev

 

[sopstjohn]

Hi Bev,

Thanks for your answer. Is there a material difference in tax between a LLC and a sole proprietorship? It sounds like the easiest option.
Do accountant would do the invoicing or it will be my responsibility? In the UK, the umbrella company take care of all the paperwork which seems much easier!
Thanks

Sophie

 

[twostep]

You can invoice using whatever format is convenient for you. Check with your state, county, municipality of residence if there are self-employment taxes in place. GA requires .91$ per 1k billed. You can file quarterly estimated taxes to avoid a single large payment come tax time. Calculate roughly 30%.

 

[Bevdeforges]

Hi Bev,

Thanks for your answer. Is there a material difference in tax between a LLC and a sole proprietorship? It sounds like the easiest option.
Do accountant would do the invoicing or it will be my responsibility? In the UK, the umbrella company take care of all the paperwork which seems much easier!
Thanks

Sophie

If you get set up with a good accountant, they should be able to either do most "write-up" work for you (at a price) or give you a system for retaining and organizing the information they'll need to prepare most of the paperwork you'll need.

Who does the invoicing may depend on what arrangement you have with your customer and how you want to organize the process.
Cheers,
Bev

 

[twostep]

If you get set up with a good accountant, they should be able to either do most "write-up" work for you (at a price) or give you a system for retaining and organizing the information they'll need to prepare most of the paperwork you'll need.

Who does the invoicing may depend on what arrangement you have with your customer and how you want to organize the process.
Cheers,
Bev

You can get user friendly accounting programs which download into main stream tax prep programs or download it for an accountant. You can expand them to payroll. I will glaldy email brands PN to avoid potential advertisement.