Paying taxes is an obligation that can cause some stress when you are living in a different country from yours, especially when every system is different
This time we offer 6 Tax tips for British in the US
1.Don’t assume you’re exempt
If you have a green card or visa that allowed you to work in the U.S. you would have to pay taxes just like any American. If you meet the Substancial Presence Test you are a legal resident. You must declare if you have been in the United States at least 31 days in the last fiscal year and a total of 183 days in the last 3 years
2. NEVER file late
If you are British you will know very well that by not declaring at the limit time you would have to pay a harmless amount of money, but when you’re living in the U.S. the situation is different. The American system is not so forgiving. If you declare your tax return late, you will be responsible for a substantial penalty and must pay up to 25% of your unpaid taxes. Lesson: do things on time.
3. Get creative
Every individual will have several different options when filing their taxes. Don’t be confused. You’re able to file as a non-resident or eligible for “first year choice”. Maybe submitting your return as a married couple will slash your bill. Always run the numbers for each scenario, this will help you find a method that probably will cost you less.
4. Filing your W4
This point is important. Every citizen must present a W4 form. For this: each employer should tell their workers the amount of tax to deduct from your salary. If employers don’t do this, you will receive a hard bill to pay or the worst case, you will have a fine.
5. Be wary of tax software
Yes, you can use technology to emerge triumphant of this process. Programs like TurboTax are very friendly for users, but they are designed to help individuals with specific circumstances or an extensive knowledge of tax code.
As a british immigrant, the wiser thing to do is hire a professional, an accountant can make this process more viable. A good accountant will ensure you don’t make mistakes that could incur hefty fines.
6. Find a good accountant
The first thing you have to do when you take the decision of hire an accountant is to ask friends about it. Maybe they have a really good accountant and you can hire someone who’s familiar with the intricacies of tax treaties between the U.S. and other nations. If you’re still filing returns in the U.K. (like you own a rental property in the U.K. or still receive an income back home), you will need to make sure you don’t double pay tax. Tax treaties exist to protect individuals from paying twice, and this is when the accountant participate and it’s able to take advantage of every potential saving.
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