Can anyone help me with a tax question in relation to living in a foreign country?
Can anyone help me with a tax question in relation to living in a foreign country?
In about two years I am planning on moving to the UK ( my soon to be wife is british). We plan on living there for about 5 years before moving back to the States. Can anyone explain to me in simple and plain english what my tax obligations for the US and UK will be. Ive tried to read some publications from the IRS but those are hard to understand and were giving me a headache. Any info would be appreciated.
Answers:
kevin h: The best answer I could give you is to go to a tax professional.
2007-12-10 22:18:21
2007-12-10 22:18:21
Chosen Answer
v b: See IRS publication 54. As a US citizen you will be taxed on worldwide income. After you get married, you will continue to file, but you can't file as single because you won't be anymore. (You can file as MFJ even if your wife is a non-resident--also see IRS publication 519.) The US is unique and taxes US citizens and resident aliens on worldwide income; the UK taxes residents, so once you meet the residency test, you will be taxed by both countries. To eliminate the double taxation, the forms 2555 and 1116 were designed. When you file, you will enter your UK income on the same lines as you would if it was US income (you convert it to dollars first). Be advised that you will have to try the tax return a number of different ways to figure out the least tax liability.
2007-12-11 00:23:23
v b: See IRS publication 54. As a US citizen you will be taxed on worldwide income. After you get married, you will continue to file, but you can't file as single because you won't be anymore. (You can file as MFJ even if your wife is a non-resident--also see IRS publication 519.) The US is unique and taxes US citizens and resident aliens on worldwide income; the UK taxes residents, so once you meet the residency test, you will be taxed by both countries. To eliminate the double taxation, the forms 2555 and 1116 were designed. When you file, you will enter your UK income on the same lines as you would if it was US income (you convert it to dollars first). Be advised that you will have to try the tax return a number of different ways to figure out the least tax liability.
2007-12-11 00:23:23