# How do I file US taxes as self-employed in UK?



## jackpen (Feb 9, 2014)

Hello everyone, apologies in advance for the long post. I am getting really worried with the tax filing deadline approaching, and really hope someone can provide me with some help. I have tried to lay out my circumstances clearly below, but can clarify anything if needs be 

*Immigration Status*

 I am a US citizen and the spouse of a UK national. I am living in the UK on a spousal visa.
 I moved to the UK in September 2014 (5 year route).
 We have one child, born in the UK in December 2015.

* Work Status *

 I am a freelance business consultant.
I am registered as self-employed with HMRC and pay UK income tax and national insurance. 

My sources of income is consulting for businesses based in the USA. When I am paid, the money (US dollars) goes into my USA bank account. I have a basic UK bank account, but primarily I spend using my US bank card here in the UK.

* Tax Status *


I filed my US taxes last year (tax year 2014), as I normally would back when I was living in the US. I used TaxAct.com.

 I tried using TaxAct again this year, but I am confused about how to comply to get Foreign Earned Income Exclusion. My earnings fall below the $100k threshold.


The tax form asks for my employer, but as I am self-employed, I do not know what to put. Have I messed up badly by not having my earnings be paid direct into my UK bank account?

In general, I am completely confused by my situation - particularly with a dependent involved - and do not know where to start, and how much I need to pay before the deadline.

I have read horror stories of people paying thousands of pounds to accountants to file correctly. I cannot afford to do this, so please can anyone help reassure me and point me in the right direction? 

Can I do this myself, or is there a service that people recommend, e.g. I have come across taxesforexpats.com


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## Bevdeforges (Nov 16, 2007)

You can do this yourself - and it's actually pretty easy. For some reason, TaxAct fell off the list of FreeFile sites appropriate for overseas taxpayers this year. May be a simple mistake.

A couple of things you need to know: where you are paid and where your customers are located has nothing to do with how you file your taxes. Basically, you file your taxes this year just like you did before - with the exception that you're now eligible for the FEIE (provided you meet the requirements).

On TaxAct (or most any tax filing software), you need to find out how and where to enter foreign salary. It's usually something different from entering your W-2 information into a form. Scroll down every list of options you have for reporting salary. There should be something there and that should lead you into the form 2555 (or potentially, the foreign tax credit form 1116). If not, see if you can pull up those forms to fill in directly.

As an overseas taxpayer, you just fill in your "employer" as yourself, or "self" or use the name you use in your business. Normally, as self-employed, there would be a question of self-employment tax, but given that you're covered by the UK social insurances, you won't owe self-employment tax. (You should get a document showing your coverage - or acknowledgement of your payments into the UK system. If you're ever challenged, that is your proof.)

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

You file as married, filing separately (unless there is some overwhelming reason to declare all your husband's income along with your own, as well as getting your husband an ITIN). If you want to claim the Child Credit, your child will have to be registered with the US Consulate and have his/her US SSN. (You also will not be able to take the FEIE if you claim the child credit.) 

You have the option to take the FEIE and simply "exclude" all your earned income from US taxation or to forego the FEIE and take the UK taxes paid as credits against whatever US tax you owe. But these options are explained in Pub 54.
Cheers,
Bev


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## jackpen (Feb 9, 2014)

Hi Bev,

Thank you so much for the information, it is very helpful and reassuring  Feeling much better now. I have another question if that's okay.

Am I still required to fill out a state fax return or is just the federal one okay? My former state of residence was Illinois


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## Bevdeforges (Nov 16, 2007)

If you have moved out of Illinois, I would just forget about filing with them any more. 

If you moved out of Illinois during the 2015 tax year and had salary or other income from the state in 2015, you'll probably have to file either a part-year return or a NR (non-resident) one just to close things out officially. But if you had no income from the state, then you shouldn't normally have to file any kind of state return.
Cheers,
Bev


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## kitkat99 (Jan 8, 2015)

Hi, i need help with the US tax. Iam US citizen and my spouse is Bristish. I worked 4 months last year before moving to live in the UK with spouse. Now i need to file tax and wonder because my spouse is not US citizen, not having SSN or ITIN, he is not living any day in the US, and he works in the UK and pay tax for UK, can i file as single? Thank you in advance


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## Bevdeforges (Nov 16, 2007)

See my reply to your other post. No, you can't file as single. You file as "married, filing separately." And you have to declare your worldwide income (i.e. your US earnings, plus any earnings you have since moving to the UK).
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Or Head of Household, if permitted.


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## kitkat99 (Jan 8, 2015)

Thank you so much for all your reply


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## USExpat111 (May 23, 2015)

Bevdeforges said:


> As an overseas taxpayer, you just fill in your "employer" as yourself, or "self" or use the name you use in your business. Normally, as self-employed, there would be a question of self-employment tax, but given that you're covered by the UK social insurances, you won't owe self-employment tax. (You should get a document showing your coverage - or acknowledgement of your payments into the UK system. If you're ever challenged, that is your proof.)....
> 
> Take a look at IRS Pub 54 https://www.irs.gov/uac/About-Publication-54 for the details.
> 
> ...


I found what you said above very interesting, Bev. How would you fill out the "employer" line on 2555 if you were both employed and had some self-employed income? Or perhaps would one use line 23 for "other foreign earned income" for the self-employed income?


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## Bevdeforges (Nov 16, 2007)

What I have done in the past is to simply list two "employers" on the line that asks for employer. Or your suggested approach could work fine, too. As usual, if they have questions, they'll be in touch. <g>
Cheers,
Bev


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