Working for my UK employer when living in the USA

[jadmac 8]

Hi everyone, 

So my employer said they are happy for me to continue my employment fully remotely in the US. 

We are trying to navigate how this will work? Anyone any experience in this area? 

 

[Crazy Cat 40,182]

Once you enter the US and become a Green Card holder (LPR), you are authorized to work.  Of course, you will have to report all world-wide income to the IRS and pay any applicable taxes on said income for that tax year.  Good luck.  

[jadmac 8]

1 minute ago, Crazy Cat said:

Once you enter the US and become a Green Card holder (LPR), you are authorized to work.  Of course, you will have to report all world-wide income to the IRS and pay any applicable taxes on said income for that tax year.  Good luck.  

Hi, yes, but we are trying to figure out how to avoid being double taxed? 

Have you been in a similar situation? 

[Crazy Cat 40,182]

1 minute ago, jadmac said:

Hi, yes, but we are trying to figure out how to avoid being double taxed? 

Have you been in a similar situation? 

Yes and No...LOL.  My wife entered via a CR-1 in 2017.  She is a retired teacher with a pension (and other recurring income).  She elected to be a dual status resident.  That meant she was a non-Resident alien until she entered the US.  I suggest you contact a qualified tax professional to help the first year.  Good luck.  

[RLA 323]

@jadmac: My current and previous employers usually ask their chambers of commerce for help with transnational taxation and employment issues.  That was in Germany and Austria.  Not sure where you're from, maybe there are similar institutions that offer similar services to employers?

[millefleur 5,039]

2 hours ago, jadmac said:

Hi, yes, but we are trying to figure out how to avoid being double taxed? 

A competent CPA should be able to help. See if you can find someone with international tax experience.

[igoyougoduke 1,628]

2 hours ago, jadmac said:

Hi, yes, but we are trying to figure out how to avoid being double taxed? 

Have you been in a similar situation? 

use Turbotax premium 

[Redro 4,603]

@Wuozopo knows a lot about taxes! 

 

You might want this question moved to the Tax and Finances section. 

You'll also want to chat to a CPA who is familiar with UK and US tax law to figure out your best option. 

[Wuozopo 4,290]

11 hours ago, igoyougoduke said:

use Turbotax premium 

I can do it with TurboTax Basic but usually buy TurboTax Deluxe because it’s on sale for the same price as Basic at Local retailers in January. I alway buy a CD for the desktop. More flexible. And we have self employed contractor (small business to IRS) and many investments which are handled just fine with Deluxe.$39,95 last year. Free online is a myth for this kind of return.

Edited November 11, 2021 by Wuozopo

[Wuozopo 4,290]

14 hours ago, jadmac said:

Hi everyone, 

So my employer said they are happy for me to continue my employment fully remotely in the US. 

We are trying to navigate how this will work? Anyone any experience in this area? 

 

I have written in the Tax forum about this before several times in great detail,  to somebody British even. Too tired to get into it now. Will look for something tomorrow. Long day. 

Edited November 11, 2021 by Wuozopo

[TBoneTX 43,670]

Because thread is chiefly about taxes, it's moved to the Tax & FInances forum.

[jadmac 8]

4 hours ago, Wuozopo said:

I have written in the Tax forum about this before several times in great detail,  to somebody British even. Too tired to get into it now. Will look for something tomorrow. Long day. 

Hi, 

Thank you that would be much appreciated! 

[Wuozopo 4,290]

8 hours ago, jadmac said:

Hi, 

Thank you that would be much appreciated! 

Going to do some cut/paste for you as I find things

————————-

Get off your foreign tax role when you move to the US. You pay tax to the country where your reside no matter the employer or where you earn or where deposited. Your employer should get an Employer Identification Number (EIN) from the IRS and withhold US tax, Medicare, and Social Security from your pay and submit online to the IRS each paycheck.At the end of the tax year he will issue you a W2 wage statement for doing your US taxes. 

 

Or he can treat you as a self-employed contractor and thus not have to hold anything out of your check. He would still get an EIN so he can issue you a 1099 wage statement at the end of the year.  You would  be responsible for paying in your own tax, Medicare, and Social Security with Quarterly Estimated Tax Payments. 
—————————————

International EIN Applicants

If you have no principal place of business, office or agency, or legal residence in the United States or U.S. Territories, you're considered an international applicant, and you can only apply for an EIN as follows:

By Telephone - If you're an international applicant, you may call 267-941-1099 (not a toll-free number) 6 a.m. to 11 p.m. (Eastern time) Monday through Friday to obtain an EIN. You must be authorized to receive the EIN and answer questions concerning the Form SS-4, Application for Employer Identification Number PDF. When applying by telephone, it's helpful to complete the Form SS-4 before contacting the IRS. An IRS representative will use the information from the Form SS-4 to establish your account and assign you an EIN.

By Fax or Mail - You can apply by fax or mail as indicated above.

—————————-

 

n 3/2/2021 at 1:49 PM,  chriskrichardson said: 

To clarify: I'll have to keep my non-US employer and work remotely until I find something!

 

So, if I'm right, my options are:

 

1. My employer gets an EIN, pays the IRS tax/medicare/social security each month, and gives me a W2 at the end of the tax year.
2. My employer gets an EIN, pays me everything/I pay everything myself, and gives me a 1099 at the end of the tax year.
(And, in either case, consult an accountant on worldwide income tax returns when I arrive in the US.)

 

And what happens if my employer does not get an EIN? Does this mean I will declare this income on my tax return without a W2/1099, and pay double tax? Thank you again for the advice.

Yes. The easiest option for the employer is #2 because he does not have to send money to the IRS each paycheck or pay a service to handle that task for him. My wife somehow accidentally ended up talking to a lady at IRS that issues EINs to foreign employers. She said it’s real easy. They just call up, give some info, and get assigned a number. Then the employer issues a 1099 to you saying how much total they paid you between Jan 1 and Dec 31. Here’s what a 1099 looks like. Most of the boxes he wouldn’t fill in. https://www.irs.gov/pub/irs-pdf/f1099msc.pdf
The left side is for His business name, address, etc and your name, address, etc. And his EIN number and your SSN. On the right side it would just be something like

Box 3. $20,123.45   Box 4. $0.00 and done because the rest of the boxes are not about wages.

If this is a UK company, I know there is a code that payroll can submit to HMRC meaning you are not taxed and no NI either. I can’t help much more because I haven’t any experience with it. He sends you the full pay with no deductions, and being wise, you will set some of each check aside for when you pay quarterly to the IRS. It’s four times a year and you just estimate what to send.It doesn’t have to be exact. The IRS just wants a bit of money coming in regularly rather than you owing a bunch at tax filing time. If you send too much, it comes back as your tax refund. 
 

On a tax return, worldwide income is no different than US income really. It’s all income and goes in the same place on a tax return. It simply income and they don’t care where it came from or if it was paid into a UK bank account.
 

 The 2021 tax year will be the more complicated return because you’re part UK resident and part US resident. You report everything you earn on your tax return, BUT the part you earned while resident In the UK (Jan & Feb), you can take a Foreign Earned Income Exclusion (Form 2555 added to your tax return.) Since you earned it while living abroad and paid taxes on it already, your US return calculates how much the US tax would have been for the 2 months and subtracts that from your total tax. TurboTax handled it for me my first year. You can also go to an accountant. 

As far as no EIN or 1099. 🤷‍♂️ Dunno. You still report how much you earned.  I have somebody who is supposed to give me a 1099 as a contractor. He hasn’t for two years. We still report how much he paid me.

 

[Wuozopo 4,290]

@jadmac  there’s more….

 

here’s a whole thread that touches on more things you might want to know. It’s a UK poster.

https://www.visajourney.com/forums/topic/757210-p85-queries/?tab=comments#comment-10385401

 

My two posts to you will hopefully give you some general concepts for starters even though in cut/paste randomness. . Ask specific questions once you have digested a bit. 

 

Edited November 11, 2021 by Wuozopo

[jadmac 8]

19 hours ago, Wuozopo said:

@jadmac  there’s more….

 

here’s a whole thread that touches on more things you might want to know. It’s a UK poster.

https://www.visajourney.com/forums/topic/757210-p85-queries/?tab=comments#comment-10385401

 

My two posts to you will hopefully give you some general concepts for starters even though in cut/paste randomness. . Ask specific questions once you have digested a bit. 

 

Thanks so much for this, much appreciated! 

Where does the turbo software fit in with all this? I.e. what does it actually allow you to do?