2017 tax year
You will not have to file any US returns for the 2017 tax year. You should file US taxes in April 2019 for all worldwide income earned in 2018. This includes any income you earned January-April 2018 while you lived in the UK. You will be able to claim a tax credit for the amount of tax you paid on this 2018 UK income on your US return to avoid be taxed twice.
For any UK income in future years (i.e. interest, dividends, or capital gains and rental income from real estate), you must pay UK tax. Again, this income should be reported on your US return and then you may take the credit for the amount of tax paid.
Be sure to fill out form P85 and send it to HMRC before you depart the UK. This will let them know that you are leaving the country. Additionally do not forget to include your income from 5 April 2018-3 May 2018, as it must be include on your 2018-2019 return.
When filing your US return in 2019, you automatically get a 2 month extension until 15 June to allow time to gather any UK tax documents you may need. If this is not enough time, make sure to file for an another extension before 15 June. This will give you until 15 October to submit your US tax return.
In California, you will owe state tax in addition to federal (US) tax. This tax is quite high, with the maximum rate being 12.3% for the top income bracket. However, you may deduct this tax payment from your gross income on your federal return.
-Decide if you want to itemize your deductions (figure out which expenses during the year are deductible from gross income) or take the standard deduction (a flat, simple reduction of GI based on filing status). Be sure to do this at both the federal and state levels and figure out which option will leave you with the lowest adjusted gross income (AGI).
Gambling winnings obtained by casual gamblers are fully taxable and must be reported as income on your tax return. Whether your success is in lotteries, casinos, horse racing, raffles or other bets, the cash winnings or value of prizes won must be declared.
Cryptocurrencies such as Bitcoin became extremely valuable and popular investments during 2017. This raised a multitude of questions about how cryptocurrency transactions should be taxed in the US. Thankfully, the IRS has offered some guidance and accountants have quickly come up to speed on the treatment of Bitcoin from a tax perspective.
With US taxes done for another year, we thought it was a good opportunity to let you know about a few changes the Internal Revenue Service (IRS) are implementing as of 2018. The new figures released are what you'll need to prepare your 2018 tax returns in 2019.
Film and television producers in New York State (NYS) are able to claim back money on their projects in the form of a refundable tax credit. The tax credit hopes to encourage creative professionals to create film and television content in NYS to help the industry thrive and keep the State's economy healthy. The incentive is available to qualified production companies that produce a variety of media outputs such as feature films, television series or television pilots. They may also be able to claim credit on post-production costs that link back with the original project.
Pensions are a popular way of supporting yourself financially within your retirement. Whether you opt for a Social Security pension, Employer Pension or a Private Pension plan, there are many things to consider when navigating potential US Tax Challenges if you are an American living in the UK.
Even though you are a UK citizen and live in the UK, the US still will attempt to tax your US pension. However, the US/UK tax treaty states that most pensions are only taxable in the country where the beneficiary is a resident. Therefore, living in the UK gets you exempt from US tax on your pension. In order to claim an exemption from this tax, there are several steps that must be taken. First, you must contact the IRS and obtain a US Taxpayer Identification Number (TIN). Once you have this, you should fill out Form W-8BEN and send it to the institution paying your pension benefits. This will allow them to send you your pension payments in full without withholding US tax. Be sure to specify the article and paragraph of the treaty that allows the taxpayer to claim this exemption (Article 18, paragraph 1).
Below is a summary of the major tax incentives that Congress has put in place to encourage certain behaviours by US corporations.
US corporations and individuals are allowed a multitude of different deductions for cash outlays they make throughout the tax year. However, for technology companies and individuals with tech-based hobbies, it can be confusing as to what expenses can be deducted. Below is a brief summary of what can and cannot be deducted for US tech companies and tech-interested individuals.