Are you a Brit living in the United States? Or an American working in the U.K.?
There are many challenges that accompany living abroad. Getting into complex hassles over your tax obligations should not be one of them.
We’re here to help with extensive information and expert advice from both sides of the Atlantic, in partnership with the chartered certified accountants and business advisors at HOLDINGS LIMITED.
Our U.K. partners specialize in advising U.S. citizens living in the U.K. A good outline of how personal taxes are collected in the U.K. is available at the HM Revenue & Customs website. You can contact them for further information on your specific status and situation.
At Medows CPA, our services are geared toward helping U.K. citizens understand what U.S. and New York State taxes they may owe on U.S.-sourced income and how they should file their returns.
Briefly, the income of foreign nationals (including “non-resident aliens”) that is subject to U.S. income tax is divided into two categories: Income connected with a U.S. trade or business; and U.S.-sourced income that is not effectively connected with a U.S. trade or business.
We can help you determine whether you are considered a “resident alien” (for instance, if you have a green card) or a “non-resident alien.” This is important because under federal law, resident aliens, like U.S. citizens, are taxed on worldwide income. Non-resident aliens are only taxed on their U.S. income.
Sound complicated? Next, you’ll need to know whether your income comes from the U.S. or from foreign sources. This is important because U.S. income (defined as “effectively connected” with a trade or business in the U.S.) is taxed at regular U.S. rates, with typical deductions allowed. But income not “effectively connected” is taxed at a flat rate of 30 percent. To make matters more confusing, if you have any income that is covered by a tax treaty, it will be taxed at the treaty rate. That can be less, but not more than, 30 percent.
Suffice it to say, trying to wade through the thicket of regulations that govern U.S. tax law yourself is near to impossible – and will take up far more time than you want to spend on such details. In addition to making sure your taxes are paid on time – and that you’re not paying more than you owe – we can help you with issues such as:
- Getting an individual taxpayer identification number,
- Handling and reporting foreign assets,
- Filing requirements and withholding.
If you need assistance with any of these issues – or have other questions related to your taxes and financial planning while you are in the U.S. – contact us in Manhattan at +1 646.415.8011.