# Personal Allowance and US Tax



## Rickmandoo (Feb 24, 2016)

Hi all,

I live living in the UK.

I am a British and American citizen, so put in tax returns for each country.

I’m taking some time off next year, and expecting to earn max £15,000. In the UK, the personal allowance is £11,000 for this year, meaning I’ll only pay tax on £4,000.

Does the US Tax me on the full amount? Or am I only taxable on the UK taxable amount?

Basically any help with how the US deals with the UK personal allowance would be great.

Many thanks.


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## nyclon (Apr 3, 2011)

I've moved your query to the tax forum where you should get more responses.


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## Rickmandoo (Feb 24, 2016)

Thank you


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## Bevdeforges (Nov 16, 2007)

OK, for your US tax returns, you do have to declare your worldwide income, so yes, the whole amount.

Now, what you'll pay tax on is another question. The US pays no attention at all to the UK taxable amount, nor to the UK personal allowance. Depending on the source of that income, you may be able to use the Foreign Earned Income Exclusion to formally exclude the "earned income" amount. And, depending on your filing status in the US, the first $10,000 or so winds up drawing no taxes, thanks to the personal exemption plus the standard deduction.

Take a look at Pub 54 from the IRS for details. https://www.irs.gov/uac/About-Publication-54
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

IRS Publication 54 explains it, but I should point out that the Foreign Tax Credit is another option, whether or not you qualify for the Foreign Earned Income Exclusion. The FTC could work better anyway if you can qualify for the Earned Income Tax Credit or Additional Child Tax Credit, as examples.


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