Paying tax on UK income while in the US

[ohspectrum 0]

Hi there,

I'm nearly at the end of my K-1 visa process, and my job here in the UK are allowing me to work remotely from the US for a couple of months after I move to the US.

While working remotely in the US for my UK job, I'll be being paid into my UK bank account and transferring money over each month. My question is whether I need to be paying tax on this UK income in the US?

Many thanks!

[JamnSol 35]

I'm no accountant, but I have done my own taxes for years.. So here is my two cents worth- you are not a US citizen, and the income is earned and paid in the UK, I would not expect to pay tax on it.

If you are a US citizen, income is taxable regardless of where it is earned.

When I worked in S. America, I filed my taxes myself, it was over 35 pages long, but I got most of the money back because it was earned outside the US.

YMMV...

James

[Anh map 2,098]

Citizens and LPR's are taxed on worldwide income. http://www.irs.gov/Businesses/Income-from-Abroad-is-Taxable

[TBoneTX 45,304]

*** Thread moved from K-1 Process forum to the Tax & Finances forum. ***

[Nich-Nick 3,354]

Hi there,

I'm nearly at the end of my K-1 visa process, and my job here in the UK are allowing me to work remotely from the US for a couple of months after I move to the US.

While working remotely in the US for my UK job, I'll be being paid into my UK bank account and transferring money over each month. My question is whether I need to be paying tax on this UK income in the US?

Many thanks!

The U.S. tax year ends Dec 31, 2015. Arriving so late in the year, will not be a permanent resident or have any U.S. income by then, so will have no obligation to file US income tax for 2015.

If you marry before the end of the year, your US spouse can file Married Filing Separately and you file nothing. That will increase her tax liability over filing jointly with you, which is another option.

You may choose to be treated as a "resident alien for tax purposes" (an IRS term) and file jointly with your spouse. But that means all your UK income earned from Jan 1-Dec 31 2015 must be reported. That doesn't mean it is taxed. There is a foreign income exclusion (Form 2555) for which you would be eligible (at least from Jan 1 until you move. Not sure of the specific details of eligibility once you leave the UK.) That will usually give her a better tax picture because she gets extra exemption and standard deduction for you and your income is excluded. So that's kinda like extra benefits to reduce her taxable income by over $10k.

Or if you wait and marry in Jan 2016, then she files 2015 as single and you file nothing in the U.S. That is likely better than married filing separately, but not as advantageous as married filing jointly (if your marry before the end of the year.

For 2016, you will definitely pay to the U.S. where you reside, even if you have a bit of UK earned income that got paid in Jan/Feb. There is a tax treaty that says you don't pay both places on the same money. The UK would need to know you were resident in the U.S. Taxes are paid to the place where you reside. If the UK did tax some of your 2016 earnings, there is a line on your US return to get credit for foreign taxes paid.

So it would be like this sorta--

$10,000 US tax

-$ 2000 foreign tax credit

________

$8000 final US tax

There are various options and you work out which saves you and the Spouse the most money. It's very complicated.

IRS Publication 519 is a starting reference.