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Discussion Starter #1
I've recently moved over from the UK to Philadelphia and I'm hoping someone on here can help me with regards to paying Pennsylvania (state), Philadelphia (city) and Federal taxes.

I currently work for a UK based company and I'm getting paid in GBP into a UK bank account. I've already got a NT code from HMRC and this has been reflected in my salary (I'm currently being paid before tax).

Will I need to pay all three types of taxes and if so, how do I go about paying them?

If anyone knows an accountant who has experience with this located in the Philadelphia area, can you pass on their details? That would be great!

Thanks!
 

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It doesn't normally make a huge difference, but what sort of visa are you on in the US?

For Federal taxes, if you aren't on a US payroll where they take "withholdings" toward Federal, State and City taxes, you are expected to make quarterly "estimated payments" toward your year-end taxes. Most states also have an "estimated tax" system similar to the Federal system, but I'm not sure about city taxes.

The kicker is if you owe "payroll taxes" (mainly US social security), you'll be expected to pay double, since your employer is not paying in the employer's portion - and in essence you'll probably be deemed to be "self-employed" in the US.
Cheers,
Bev
 

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Before we leap to that Social Security conclusion, are you still making U.K. National Insurance contributions, TornadoTail? If so, that should be fine (if you wish to continue participating in the U.K. system), but check the U.S.-U.K. Social Security treaty for the details. If not, yes, you'll have to make U.S. Social Security/Medicare contributions.
 

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I'm on an L-2 Visa (my husband has the L-1 but he's employed by a US company and being paid US wages so his tax is ok!).

National Insurance payments are still coming out of my wages so I presume I'm ok on the SS front but I will check the treaty just in case.

I know I need to pay taxes, it's just understanding which ones and how I do this when I've not got an employer over here which is the tricky bit...
 

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You're most probably OK continuing to make U.K. NI contributions up to 5 years. Past 5 years you'll probably need to switch to the U.S. system. You may have the choice of switching to the U.S. system earlier, and you might want to consider that. The U.S. system is very good, and you can qualify for a retirement benefit after as little as 2 partial years of contributions if you've got at least 8 years of NI contributions by the time you retire. (I'm summarizing how the treaty usually gets applied to people in your situation, but do check the U.S. Social Security Web site for their excellent summary of the U.S.-U.K. treaty provisions. The treaty is called a "totalization agreement," by the way, so look for that.)

Yes, for Philadelphia you have federal, state, and local income taxes. As Bev mentions you're required to make estimated tax payments quarterly -- start now if you haven't done that yet. (The next estimated quarterly tax payment is due January 15, 2015. It's the final estimated tax payment for tax year 2014.) Assuming you arrived in the U.S. in 2014 then 2014 will be your first U.S. tax year, so you'll file your tax returns for 2014 in early 2015 and settle your outstanding tax bill by April 15, 2015. (Your first estimated tax payment for tax year 2015 is also due on that date.)

You can try using the tax preparation Web sites. The free TaxAct.com is a popular one, but there are others.

That said, you most likely will want to file a joint tax return with your husband ("Married Filing Jointly") since that's almost always the most favorable filing status for married couples living in the U.S. Is your husband receiving tax preparation assistance from his employer? That's not uncommon for L-1s. If so, they should be handling a MFJ return that includes you both, so you'd just participate in that effort. But you will want to look into making estimated tax payments if you haven't started so you can minimize the penalties for late payment. (The penalties aren't too bad, but they're enough to worry about.)
 
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