Expat Forum For People Moving Overseas And Living Abroad banner

1 - 5 of 5 Posts

·
Registered
Joined
·
51 Posts
Discussion Starter · #1 ·
I am a US citizen living in the UK for just over one year. 2013 will be the first year I am filing on my own, or finding a US CPA. My longterm CPA in California doesn't want to deal with it anymore. I just started a little dog walking/ pet sitting business so am self employed. My earnings will be small and probably under the personal allowance in the UK so I won't probably pay UK tax. I understand I can't use the FEIE when filing US taxes, so what do I do? I do have US investments and will be selling quite a lot this year in order to buy a narrowboat. I will be filing singly, but am married to a UK citizen. I have never prepared my own taxes, so is it possible for me to do so or should I find a CPA? If so, can anyone recommend a firm.
I have used this forum many times since my move, and greatly appreciate the sound advice that is shared. Thanks!
 

·
Administrator
Joined
·
50,008 Posts
If you're married to a UK citizen, then you should be filing "married, filing separately."

You shouldn't need a CPA to file a relatively simple tax return - you should try using one of the online tax filing programs before you pay a tax advisor. But if you decide to go for a tax preparer, look into finding an enrolled agent in the UK first. They are normally a bit less expensive than CPA's (though still considerably more expensive than using one of the tax programs).

Why can't you use the FEIE for your personal business? Normally it's available, even for a personal business - and if you are paying into the UK social insurances based on your business activities, you may wind up being exempt from social security payments to the US (based on the tax treaty).

Start by downloading IRS Publication 54 which explains the filing from overseas thing.
Cheers,
Bev
 

·
Registered
Joined
·
51 Posts
Discussion Starter · #3 ·
Thanks Bev,

I am confused as I always am with US taxes. Other people have told me, and my reading of self employment on IRS PUB 54 seems to say that as a US citizen self employed person in the UK even with minimal profit (£200 per month) when I can claim the small earnings NI exception here in the UK, still means I can't claim FEIE and must pay self employment tax to the US. Am i totally wrong? It certainly seems nuts to me. I hope someone can tell me what is correct. I have written to my US CPA but don't think she knows anything about Expats.
Kind Regards, Clare
 

·
Administrator
Joined
·
50,008 Posts
Recently saw an article about the practical side to enforcing all that FATCA stuff back in the US. In the long term, it comes down to what means of enforcement are available, whether to the IRS or to the SS Administration with regard to overseas residents and accounts. If you're already covered by the UK system for health care and retirement, I would tend to take the "assertive" position that you should not be paying US Social Security taxes. If the IRS disagrees, they'll be in touch - but chances are they won't bother to pursue the issue for the piddly amounts involved.
Cheers,
Bev
 

·
Registered
Joined
·
51 Posts
Discussion Starter · #5 ·
Recently saw an article about the practical side to enforcing all that FATCA stuff back in the US. In the long term, it comes down to what means of enforcement are available, whether to the IRS or to the SS Administration with regard to overseas residents and accounts. If you're already covered by the UK system for health care and retirement, I would tend to take the "assertive" position that you should not be paying US Social Security taxes. If the IRS disagrees, they'll be in touch - but chances are they won't bother to pursue the issue for the piddly amounts involved.
Cheers,
Bev
As always, I greatly appreciate your advice.
 
1 - 5 of 5 Posts
Top