Taxes with CR1

[eliseb 0]

My husband, from the UK, just received his CR1 visa last week and is now in the USA with me. We are wondering about the legalities of paying taxes. Does anyone know a good place for information for dealing with taxed from two countries? My husband is going for a job interview this week and we want to be sure we are doing everything right when it comes to taxes. Neither of us are planning on moving back the the UK and we don't own anything there. Do you know if there are taxes we still need to pay in the UK even if we are not living there? And is there anything different we need to do with taxes in the USA?

Any help would be GREATLY appreciated!

[hobbitofohio 10]

Here are links to two IRS publications that should cover most of your questions about USA income tax.

http://www.irs.gov/pub/irs-pdf/p519.pdf

http://www.irs.gov/pub/irs-pdf/p17.pdf

If you do not find what you need, please ask. I manage a tax preparation office and am married to a Russian national. I do not know UK tax laws.

[hobbitofohio 10]

I forgot to list the publication on US Tax Treaties.

http://www.irs.gov/pub/irs-pdf/p901.pdf

[eliseb 0]

Thank you so much. I will read through this and might be asking you a few questions afterwards. Thanks again for your help!

I forgot to list the publication on US Tax Treaties.

http://www.irs.gov/p...rs-pdf/p901.pdf

[Nich-Nick 3,353]

He can file the P85 in the UK and if he has overpaid any taxes this year, they will be refunded. There is no requirement for filing taxes yearly if he isn't working there.

In the US, as a permanent resident, he will file taxes jointly with you just like any USC couple. For tax year 2010 (filing early 2011) if you file jointly, you have to include worldwide income. That would be basically his UK income from Jan-Dec 2010 converted into US dollars. No official form from the UK (like our W2) has to be sent in. Just figure out his UK income based on his salary or some pay stubs and apply a currency conversion. Ours was somewhat random but as close as we could estimate.

So, before you think the US is going to charge taxes on his UK earned income, there's more.....

The IRS allows an income exclusion for foreign income. It's quite high but we won't know the 2010 limit until all the tax forms are published. It's $90K-ish per year. If he earned less than that, he gets to exclude those earnings. It is based on the number of days he was in the UK. So if was there a whole year the max is $90K-ish, but if he was there only half the year, the max he could exclude would be $45K-ish. Basically the IRS wants you to tell them about US and foreign earnings (on a joint return) but they aren't going to tax his UK earnings. You other option is file "married filing separately" and he does nothing. Your taxes will probably be lower filing joint, plus a joint return will be good evidence to submit two years from now when he has to apply for his 10 year green card. It is evidence of co-mingling finances.

This forum has extensive tax talk during Jan-April. After the first year, there will be no difference in doing your taxes with him than with somebody who was born here.

There also is a form to fill out and send in each year if he maintains UK bank accounts with more than $10,000. It has nothing to do with taxes, but my TurboTax reminded me and had the form. It is called TDF 90-22.1 It is just for reporting to the federal government and has no tax feature to it. 2010 will be due by June 30 of 2011 (only if he leaves over $10,000 in UK banks.)

[Y&E 12]

UK / USA have a double tax agreement and won't tax on income earned in the other country. As a general rule most people in the UK don't have to file a tax return anyway. One thing to note though, if you do ever return to the UK and earn money you will have to continue to file a US tax return. If your spouse gives up their GC they will no longer be obliged to do that but if they take up citizenship they will.

The US likes to know what it's residents are doing with their money even if they're no longer in the country.