# Tax questions for US citizen living in UK for last few months



## manny.j (Dec 4, 2011)

Hi All:

My situation, in regards to taxes, is as follows:

1. I moved to the UK a few months ago and had worked in the US for first few months of 2012.
2. Got a job in the UK within a few days and now working full time.
3. In April 2013, I shall be filling my UK tax returns (currently my situation has resulted in my firm paying my income without deducting NI etc.) where I will be lawfully paying any taxes I owe here on the income I earned here.

*My questions are*:

1. Since I only worked for first few months of 2012 in the US, is the tax form different from 1040, Schedule B forms? 

2. Am I required to provide my income in the UK in the US tax returns? If yes, will I be taxed even though I will be paying my UK income taxes here?

3. My address has changed from US to UK as I live here, am I obligated to inform this to the US embassy or IRS for tax purposes? If yes, kindly suggest how?

4. Can these tax forms be filled online for US citizens living abroad?


Thank you!

Manny


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## Bevdeforges (Nov 16, 2007)

manny.j said:


> Hi All:
> 
> My situation, in regards to taxes, is as follows:
> 
> ...


Since you are "from" the US, I assume you're a US citizen. That means you will ALWAYS file a straight 1040 with all the sub schedules, just like you did in the US. Though since you're living and working overseas now, make sure you download a form 2555 (foreign earned income exclusion) and a copy of publication 54 for taxpayers living overseas.



> 2. Am I required to provide my income in the UK in the US tax returns? If yes, will I be taxed even though I will be paying my UK income taxes here?


Yes, you always report your worldwide income for US tax purposes.



> 3. My address has changed from US to UK as I live here, am I obligated to inform this to the US embassy or IRS for tax purposes? If yes, kindly suggest how?


See Pub 54 for details (and there is an IRS change of address form you can use) - otherwise just use your UK address when filing your tax returns for the US and they'll figure it out.



> 4. Can these tax forms be filled online for US citizens living abroad?


Maybe. The IRS isn't accepting any 2012 tax returns until January 30th this year because of all the hoo haa over the "fiscal cliff" and a couple changes the final solution made to the forms. But after that, take a look at the IRS website information on e-filing. Last year, there were only 7 or 8 e-filers who could deal with foreign addresses. Depending on your AGI, you may be eligible for free e-filing, but there are normally income and age restrictions.

The London consulate of the US has an IRS office, but I don't find a link for them on the Embassy website (yet?). In a pinch, use the IRS pages from the Paris consulate site: U.S. Taxes (IRS) | Embassy of the United States Paris, France They normally have information on e-filing from overseas, and publish a handy pamphlet each year to summarize the basics of filing from overseas.
Cheers,
Bev


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## manny.j (Dec 4, 2011)

Thanks Bev for the helpful information! I assume Form 2555 will ensure I am not taxes on my UK income and only on what I earned in the US.

There were indeed a few e-filers last year for US residents with foreign income or banks but I found due to introduction of new rules FATCA (Form 8938) they were full of bugs and unreliable, which made it difficult to submit online. Hopefully that would have now sorted out.

Thanks again mate.

Manny


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## Bevdeforges (Nov 16, 2007)

Form 2555 will exclude your "earned income" (i.e. salary income) from the UK from US taxation - at least up to about $92K.

If you only moved to the UK a few months ago, though, you may have to wait to file 2012 until you have passed the "physical presence" test - i.e. until you have been resident overseas for a full 12 months. Details about how to do this are in Publication 54.
Cheers,
Bev


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## manny.j (Dec 4, 2011)

Bevdeforges said:


> Form 2555 will exclude your "earned income" (i.e. salary income) from the UK from US taxation - at least up to about $92K.
> 
> If you only moved to the UK a few months ago, though, you may have to wait to file 2012 until you have passed the "physical presence" test - i.e. until you have been resident overseas for a full 12 months. Details about how to do this are in Publication 54.
> Cheers,
> Bev


Hi Bev:

Your information above is very valuable, thank you. 

I have been downloading these forms you mentioned above (1040 and 2555). There were a few additional questions that came up, which I would really appreciate if you can provide your feedback on:

1. Basically I have a good job here in the UK, where I am working for a US firm which pays my income at present from its US funds as my company is working hard towards starting up subsidiary in the UK. Since they transfer the money from the US to my UK bank and I reside in the UK, I will be paying my UK taxes next month (April 2013) as the UK taxes are not yet deducted. My salary however is less than $90,000, which I believe is some sort of threshold above which one has to pay US taxes on.

2. My salary in the US was below $6,500 combined for me and my wife, and we paid about $500 extra in taxes once I received my work income.

3. I have not yet passed the "Physical Presence" test as we did not move here until May 2012. 

4. Moreover, I also have to file my UK tax returns and will be paying my UK taxes on income I earned since I got this job.

So...taking point 3 into account, how can I fill my US taxes if I have not passed the physical presence test and, at the same time, have to remember that around mid-April is when the tax deadline looms?

If I decide not to file these taxes myself, can you recommend a reliable group that can file: (a) Both US and UK taxes or (b) Only my US taxes (in case I decide to do my UK taxes locally).

What are the typical charges for these services?

I am sorry for bombarding with so many questions, I guess its a little nerve-wrecking whenever it comes to doing taxes


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## Bevdeforges (Nov 16, 2007)

OK, if you moved to the UK in May, 2012, that means that you can't file your US returns for 2012 until at least June, 2013 if you want to take the foreign earned income exclusion. However, because you are living overseas on April 15th, your US filing deadline is automatically extended to June 15th anyhow. 

You have another option, and that is to file your 2012 US taxes without taking the FEIE, and then after you've passed the one year mark in the UK, you amend your 2012 returns to claim back the FEIE. Frankly, this is the hard way around this issue. Practically speaking, you can prepare your US taxes now, taking the FEIE, but just sit on the returns until you reach your anniversary date for the move to the UK. Sign 'em and date 'em the day after your first anniversary in the UK - and just don't mail them in until the first week in June.

Download Publication 54 now and look through it. It explains all the fine details a bit more elegantly than I can. 

Unless you're prepared to go with someone "big name" (like one of the major international accounting firms) for your taxes - like, if your employer will pick up the cost - the best place to find a "tax person" is through one of the US expat groups in the UK. Your wife may want to look into one of the FAWCO clubs England - Region 1 and any one of those will have folks who can recommend tax preparers.
Cheers,
Bev


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## nikkisizer (Aug 20, 2011)

manny.j said:


> If I decide not to file these taxes myself, can you recommend a reliable group that can file: (a) Both US and UK taxes or (b) Only my US taxes (in case I decide to do my UK taxes locally).
> 
> What are the typical charges for these services?


Hi Manny,

If you decide to opt for an Accountant to file your UK tax return for you you will typically pay between £250-£450 for their services.


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