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Richard Purves

Question over Tax

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Hi,

 

I've recently been approved for my own visa and looking to move over soon. The question is, if I move before the end of the current tax year (e.g. 2nd week December) will I be required to file on my UK income at that point? I assume declaring for FATCA too?

 

Or do I delay my move until the first week of January 2020 to make life easier?

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22 minutes ago, Richard Purves said:

Hi,

 

I've recently been approved for my own visa and looking to move over soon. The question is, if I move before the end of the current tax year (e.g. 2nd week December) will I be required to file on my UK income at that point? I assume declaring for FATCA too?

 

Or do I delay my move until the first week of January 2020 to make life easier?

Generally of you are not making over $100,000us in foreign income, you report it but don;t owe taxes on it.


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Posted (edited)

Start reading Publication 519 from IRS.gov

You do not pay US tax on your UK Income earnedwhile resident in the U.K.(ifyou areu dear the threshold). There are instances where it would be reported if you filed a US return, but reporting and being taxed on it are separate things.

 

Will you earn any income in calendar year 2019 after moving?

Edited by Wuozopo

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Posted (edited)

You mean 2019? Assuming so ...

 

I will have finished my employment certainly by the time of moving, however I will continue to receive pay checks for 5 weeks after my job finishes because my pay is a month in arrears.

Edited by Richard Purves
clarified statement

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Posted (edited)
2 hours ago, Richard Purves said:

You mean 2019? Assuming so ...

Yep, I caught that and got the edit in, but totally messed up "if you are under the threshold".

 

So under the US/UK tax treaty, you pay the country where you live. The date you move you are a resident of the US. You should not be taxed by the UK on that last bit after you move.  

You file in the US if you earn over $12,000 during the tax year. (That is the figure for a single person for 2018 because 2019 tax form/rules are not finalized yet. It can change or stay the same, but gives you an approximate figure. It will not change much if at all). If you don't earn enough while a US resident, then you don't have to file.  You will be considered a Resident Alien for the tax year. If you earn enough income in the last months of 2019 (while in the US) to file, then you report all income earned during 2019 even the UK part. Then you have to exclude it so not taxed on it. Or take a tax credit for what got paid to the UK.

 

Read the beginning of Publication 519. https://www.irs.gov/pub/irs-pdf/p519.pdf

There's a dual status year discussed as well which is another way to file if you earn more than $12k in the US and have to file a US return. 

 

Note: that Publication above is for 2018 because there is no 2019 out yet, but the rules will stay the same so it's a good source to review. You will be resident alien for filing because you will have a greencard in 2019 If you enter the US in 2019. So you can skip parts discussing non-resident alien taxes and focus on the resident alien parts...or the dual status filing.

Edited by Wuozopo

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Well that convinces me to do two things:

  1. Move over in January 2020.
  2. Find a bloody good accountant! Looking at H&R Block atm.

I am not going to have a simple time of it. I've three media projects that are likely to pay out as investments next year.

 

Thanks for the advice. I've bookmarked that IRS page for review when it's not 10:40pm ;) 

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