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I just thought of something.... What about taxes in the US once I move to the UK? Can i still file for my last 2 income taxes while im in the us?
 

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I just thought of something.... What about taxes in the US once I move to the UK? Can i still file for my last 2 income taxes while im in the us?
You don't escape the 1040 just because you've moved to Blighty! You need to file it every year!
 

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along those lines.....

I heard I will have to pay US taxes for the first year I am living and earning in the UK.....will I have to pay both US and UK taxes? Is there anywhere I can do some research?
 

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You don't escape the 1040 just because you've moved to Blighty! You need to file it every year!
actually wasnt even thinking of trying to evade it....wow


so yer...just wondering to everyone else .... who doesn't think the worst in people...

any different filing status's you have to go under etc :cool:
 

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I heard I will have to pay US taxes for the first year I am living and earning in the UK.....will I have to pay both US and UK taxes? Is there anywhere I can do some research?
If you're a US citizen, you always have to file a US tax return -- wherever in the world you are living and wherever your income comes from.

So if you're a US citizen living and working in the UK, you will account for your income taxes to two governments: Her Majesty's and Uncle Sam's. This obligation will not reduce to one government after a year.
 

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actually wasnt even thinking of trying to evade it....wow


so yer...just wondering to everyone else .... who doesn't think the worst in people...

any different filing status's you have to go under etc :cool:
You misunderstood. You don't get out of accounting for your US taxes for Uncle Sam every year until you are no longer a US citizen -- and even then it can be tricky. Moving to the UK does not absolve you of that responsibility.
 

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But you do get a foreign income allowance of around $86,000 a year and further $14,000 in housing allowance, so if your earnings come below them, you have no liability to pay income tax to IRS, but you still have to make your return.
 

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Basically, what Fatbrit and Joppa have said, with a couple of caveats:

The overseas earned income exclusion is up to slightly over $91,400 for 2009. This only applies to earned income, i.e. salary. And as Fatbrit pointed out, you must file a tax return each year in order to claim the exclusion (and to claim the exclusion, you must meet certain requirements about residing outside the US).

The first year is the toughest, as you are not entitled to take the exclusion until you have spent either an entire calendar year outside the US, or until you have spent 12 consecutive months outside the US.

You still have to pay US taxes on various forms of "unearned income" - usually stuff like interest, investments, rents, etc. Anything basically that doesn't come in the form of a paycheck with local taxes and social insurances taken from it. If you're in business for yourself, you can usually treat your income as "salary" but not always - it depends on how your business is set up. In some cases, you may still be subject to social security contributions at the self-employed rate (i.e. double). (IOW, it pays to set up a personal business carefully when you're overseas in order to avoid the hassle.)

Peppera-ann - chances are you'll have to file your US returns as "married, filing separately" which has certain disadvantages, though nothing too extreme until you start drawing social security from the US.
Cheers,
Bev
 

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Discussion Starter #9
Basically, what Fatbrit and Joppa have said, with a couple of caveats:

The overseas earned income exclusion is up to slightly over $91,400 for 2009. This only applies to earned income, i.e. salary. And as Fatbrit pointed out, you must file a tax return each year in order to claim the exclusion (and to claim the exclusion, you must meet certain requirements about residing outside the US).

The first year is the toughest, as you are not entitled to take the exclusion until you have spent either an entire calendar year outside the US, or until you have spent 12 consecutive months outside the US.

You still have to pay US taxes on various forms of "unearned income" - usually stuff like interest, investments, rents, etc. Anything basically that doesn't come in the form of a paycheck with local taxes and social insurances taken from it. If you're in business for yourself, you can usually treat your income as "salary" but not always - it depends on how your business is set up. In some cases, you may still be subject to social security contributions at the self-employed rate (i.e. double). (IOW, it pays to set up a personal business carefully when you're overseas in order to avoid the hassle.)

Peppera-ann - chances are you'll have to file your US returns as "married, filing separately" which has certain disadvantages, though nothing too extreme until you start drawing social security from the US.
Cheers,
Bev
thanks bev!! always appreciate your detail!
 

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Account for vs. paying?

Basically, what Fatbrit and Joppa have said, with a couple of caveats:

The overseas earned income exclusion is up to slightly over $91,400 for 2009. This only applies to earned income, i.e. salary. And as Fatbrit pointed out, you must file a tax return each year in order to claim the exclusion (and to claim the exclusion, you must meet certain requirements about residing outside the US).

The first year is the toughest, as you are not entitled to take the exclusion until you have spent either an entire calendar year outside the US, or until you have spent 12 consecutive months outside the US.

You still have to pay US taxes on various forms of "unearned income" - usually stuff like interest, investments, rents, etc. Anything basically that doesn't come in the form of a paycheck with local taxes and social insurances taken from it. If you're in business for yourself, you can usually treat your income as "salary" but not always - it depends on how your business is set up. In some cases, you may still be subject to social security contributions at the self-employed rate (i.e. double). (IOW, it pays to set up a personal business carefully when you're overseas in order to avoid the hassle.)

Peppera-ann - chances are you'll have to file your US returns as "married, filing separately" which has certain disadvantages, though nothing too extreme until you start drawing social security from the US.
Cheers,
Bev
Okay, I know how to deal with USA, but do I file taxes in BOTH countries but only pay in US? I still can't get around my head where I file. I know I have to file/pay in USA (But limited as I have bona fide for years and foreign income exclusion) but this is my first full tax year in UK. Do I file here?
 

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Okay, I know how to deal with USA, but do I file taxes in BOTH countries but only pay in US? I still can't get around my head where I file. I know I have to file/pay in USA (But limited as I have bona fide for years and foreign income exclusion) but this is my first full tax year in UK. Do I file here?
Yes, you file in both countries. And the UK makes it tricky because their tax year is something other than a calendar year.

If you're resident in Scotland (or the UK), then you should be filing and paying in the UK. You take the exclusion for your earned income on your US form, and so you generally don't pay taxes to the US, other than perhaps on earned income over and above the exclusion amount (though that is offset by any taxes paid to the UK) and perhaps on certain types of unearned income from US sources.

What is tricky is that with the April to April UK tax year, you have to do everything on a cash basis for US return purposes. What that means is that you get to deduct the actual taxes paid between January 2009 and December 2009 (say, if you have UK taxes withheld from your pay) - not what you wind up paying based on your UK tax filing.
Cheers,
Bev
 

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Thanks Bev!

Yes, you file in both countries. And the UK makes it tricky because their tax year is something other than a calendar year.

If you're resident in Scotland (or the UK), then you should be filing and paying in the UK. You take the exclusion for your earned income on your US form, and so you generally don't pay taxes to the US, other than perhaps on earned income over and above the exclusion amount (though that is offset by any taxes paid to the UK) and perhaps on certain types of unearned income from US sources.

What is tricky is that with the April to April UK tax year, you have to do everything on a cash basis for US return purposes. What that means is that you get to deduct the actual taxes paid between January 2009 and December 2009 (say, if you have UK taxes withheld from your pay) - not what you wind up paying based on your UK tax filing.
Cheers,
Bev
Bev, your tax suggestions (advice!!!) is always read and always welcome. Thanks!!!
 
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