Help! US taxes are so confusing

[NewToTheUS2020 0]

I moved to the US (from the UK) in March 2020 with a K1 visa, married and filed for AOS in April.

 

I had a UK based business, and took the remaining money out of the business at the beginning of April 2020 (before UK tax year ended), as I was closing it down.

I am now wondering how to pay taxes. Do I owe US taxes on this money? I haven't worked in the US yet and probably won't until 2021. 

 

Also, regarding substantial presence. I was here visiting my partner over the new year, so I was here on the first few days of January. I know that counts towards the days required for substantial presence, but I moved here in March so trying to determine if I owe taxes on everything I earned this year given that I was her eon Jan 1.

 

Thanks for any help. The tax situation is very complex to understand and navigate!

[aaron2020 11,651]

Hi,

 

You need a professional accountant to handle this.  One that is familiar with the US/UK tax treaty.  

Best of luck.

[Lucky2Lucky 2,526]

30 minutes ago, NewToTheUS2020 said:

I moved to the US (from the UK) in March 2020 with a K1 visa, married and filed for AOS in April.

 

I had a UK based business, and took the remaining money out of the business at the beginning of April 2020 (before UK tax year ended), as I was closing it down.

I am now wondering how to pay taxes. Do I owe US taxes on this money? I haven't worked in the US yet and probably won't until 2021. 

 

Also, regarding substantial presence. I was here visiting my partner over the new year, so I was here on the first few days of January. I know that counts towards the days required for substantial presence, but I moved here in March so trying to determine if I owe taxes on everything I earned this year given that I was her eon Jan 1.

 

Thanks for any help. The tax situation is very complex to understand and navigate!

You don’t file for 2020 taxes until 2021. Relax, take a deep breath, you have time to find an accountant 🙂 

[NewToTheUS2020 0]

25 minutes ago, Luckycuds said:

You don’t file for 2020 taxes until 2021. Relax, take a deep breath, you have time to find an accountant 🙂 

Thanks for the reassurance!

 

My UK taxes are due soon so I am trying to figure out to which government that money is owed. Also as I have not been working for 6+ months now, I am trying to figure out how much taxes I will owe so that I know how much to set aside.

[carmel34 3,647]

16 hours ago, NewToTheUS2020 said:

My UK taxes are due soon so I am trying to figure out to which government that money is owed. Also as I have not been working for 6+ months now, I am trying to figure out how much taxes I will owe so that I know how much to set aside.

 

You have two options as I see it:

 

1.  Set aside some money to hire an experienced tax accountant who knows US and UK tax laws and treaties, whether the accountant is in the US or UK doesn't matter, but their fees could be substantial.  The accountant files your UK taxes for you now, then next year for the US, but with an estimate now for how much you need to set aside for any US tax liability next year.  Or, use the accountant you had for your UK business (assuming you had one), to file your UK taxes, then find an accountant in the US to do an estimate for your 2020 US taxes and file your IRS return next year when it is due.

 

2.  If you are so inclined, spend a few days on the gov.uk website and the irs.gov websites and read all you can on both UK and US taxes, residency issues, selling a business, tax treaties, etc., and file your UK taxes now and US taxes next year totally on your own.  I did this when I moved from Canada to the US a few years back because all of the tax accountants I talked to where I lived in Texas had no clue about US/Canada tax laws and treaties.  I have filed all of my tax returns on my own ever since.  I'm not an accountant, but I had enough accounting classes in my MBA program that it's not too difficult, especially compared to that one year when I filed tax returns in two countries.

 

Good luck!