# American with UK student visa considering work in the UK



## heartland (Apr 22, 2016)

Hi! Sorry if something similar has been posted before, I looked through a bit and didn't see anything, and I've been having a rough time with IRS sites so I figured I should just post and see 

Essentially, I'm going to be out of money by the end of this summer, so I'd like to get just a part-time job here in the UK. However, my mom worries that US taxes with be so much that they'll take practically everything. She says when she files taxes for some commission work she does writing a textbook, she is charged both state and national taxes for both the amount they would normally take from her, but also what they would've taken from an employer, as well as a fee for not having paid in over the course of the year and rather doing it in one lump sum (as that is how she is paid). Since I will be making so little, she worries that for me this will amount to nearly, if not, all of my income.

Also because I will be making so little, my friends here in the UK tell me the UK will not be taking out any taxes from my income, so I I believe I wouldn't qualify for a Foreign Tax Credit so that's out.

In addition, I don't believe I'd qualify for a foreign earned income exclusion because a) I do live (split between my mother's home and my place of work) and work (camp counselor: I make about $3k a summer) in the US during the summers- so no 330 rule qualification and b) because I am on a sandwich placement meaning that the year after next (starting September 2017) I will be on internship which may or may not mean living in the US for an amount of time that year and after I graduate (May 2019) I may or may not return to the US- so no bona fide qualification, I think?.

Can anyone clear this up for me? I've only ever filed taxes once (I'm 19) and in reality my mom did it from the US while I was skyping in to answer questions and so that I knew vaguely how the process went, so I don't know much at all about what things look like. Let me know if there's anything you need me to clear up for you as well about my visa or anything


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## Nononymous (Jul 12, 2011)

You have the option of not reporting anything - the IRS would have no way of knowing that you had some part-time earnings in the UK.

But your mother probably wouldn't approve.


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## Bevdeforges (Nov 16, 2007)

First of all, you need to determine what (if any) limitations there are to you working on your student visa. Some countries limit students to a certain number of hours, or a certain amount they can earn if they are working during the holiday period. If you're good to go there, then I assume the lack of tax withholding by the UK would be related to the idea that you wouldn't be earning as much as the "personal allowance" is there, and thus you wouldn't need to file, nor to pay taxes. OK, that's the good news.

Then, on the US side, you're right about your eligibility for the FEIE and/or FTC. If you're not paying UK income taxes, there are no foreign taxes to offset your US liability. And if you can't meet either the Bona Fide resident test or the Physical Presence test, then the FEIE is off the table.

Next, though, you have to determine your "tax residence" in the US. You'll wind up paying US taxes (unless your earnings put you below the filing threshold for your filing status (assume it's single) - $10,300 for 2015. This will probably be bumped up a bit for 2016 filings. But the kicker is what state you're resident in. The states all have different thresholds for filing - some based on your Federal return, others based on your income.



> However, my mom worries that US taxes with be so much that they'll take practically everything. She says when she files taxes for some commission work she does writing a textbook, she is charged both state and national taxes for both the amount they would normally take from her, but also what they would've taken from an employer, as well as a fee for not having paid in over the course of the year and rather doing it in one lump sum (as that is how she is paid).


Your Mom's concern is well considered, however she seems to be talking about a much larger amount of income. And it sounds like she has to pay "self-employment" taxes - which is US Social Security times two (because normally the employer pays half). As long as you're covered in the UK for social insurances, you should be able to avoid the "self-employment" tax, thanks to the US-UK social security treaty.

Just a hint for your Mom - she can avoid the "fee" for paying in one lump sum by making "estimated payments" quarterly over the course of the year in the amount of the taxes she paid last year. She can always adjust the 4th quarter payment to cover any swing in her pay for the year. As long as she has paid in 90% (I think it is) of her total tax bill by the time she files her tax forms in April, she'll be spared the "penalty."
Cheers,
Bev


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## Bevdeforges (Nov 16, 2007)

Nononymous said:


> You have the option of not reporting anything - the IRS would have no way of knowing that you had some part-time earnings in the UK.
> 
> But your mother probably wouldn't approve.


This is also an option - however unless you'll be pulling in more that that $10,000 figure, there's a good chance you won't need to file at all anyhow.
Cheers,
Bev


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## heartland (Apr 22, 2016)

Thank you both so much for your replies! 

Nononymous- ahaha I did think of that, but I think you're right- and as she's agreed to pay for my flights (I'd have to stay here otherwise, and as a single mom to an only child she misses me, poor thing) I'd like to stay on her good side for the time being 

Bevdeforges- According to my Tier 4 Student Visa I'm allowed to work 20 hours/week so all good there 
I'm from Nebraska, and last year I'm pretty sure I didn't have to pay taxes (or at least it was very little), but I did have to file in order to get back what my work automatically took out, which will be the same this year. I won't likely hit that $10k figure between the two jobs, so that's super relieving.
Ah, that makes a lot of sense about the self-employment tax, that's good for me then since I am under NHS and such  I'll let her know about the quarterly thing, thanks!


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## BBCWatcher (Dec 28, 2012)

Bevdeforges said:


> ....however unless you'll be pulling in more that that $10,000 figure, there's a good chance you won't need to file at all anyhow.


That figure is on a total worldwide income basis, please note.

Note that the American Opportunity Tax Credit and possibly the Earned Income Tax Credit are in play here, so even if not _required_ to file a U.S. tax return it would likely be very _wise_ to file.


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## heartland (Apr 22, 2016)

BBCWatcher said:


> That figure is on a total worldwide income basis, please note.
> 
> Note that the American Opportunity Tax Credit and possibly the Earned Income Tax Credit are in play here, so even if not _required_ to file a U.S. tax return it would likely be very _wise_ to file.


Thank you for your response!

Yes, I understood, thank you  I don't foresee hitting this between 3k over the summer and part time minimum wage over the school year, and if I saw myself coming close I'd stop work to ensure I didn't until my taxes were filed.

I will definitely file my taxes, as I said my summer employer automatically takes out so I have to file to get that money back. Though I'm pretty sure I don't qualify for either as a) my institution is not American accredited (so I can't get gov student loans or grants either, hence why I've ran out of money and need the job) and b) I'm still considered a dependent on my mother's taxes.


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