| " Is it true that I will have to both US taxes even if I'm getting paid in pounds? If so, for how long and how can I limit how much I am taxed?"---> You, as either US citizen( national) or a resiedent alien either (or both) uner the US Tax Code and US INS Rules are generally subject to tax on both your US and world wide inocome tio the IRS; you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income,i.e., passive , active or regular income on your U.S. tax return.
However, you can take foreign tax credits on your taxes that you paid to the UK Taxing authority on your US tax return;this means that you can claim a credit only for foreign taxes that are imposed on you by UK taxing authority. Also you may qualify to exclude from income up to $91,400 of your foreign earnings that you earned there in UK by bein' physically present in UK or countries for at least 330 full days during any period of 12 consecutive months. In addition, you can exclude or deduct certain foreign housing amounts. However, as far as I know, you can't take tax deduction on your income taxes paid to UK authority on your State income tax return( if your State imposes income taxes). The tax treaty beween US and UK doesn't work for State level taxation.
REMEMBER; If you own or have authority over a foreign financial account, including a bank account, brokerage account, mutual fund, unit trust, or other types of financial accounts, you MUST report the account yearly to the IRS. If the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year, then ,under the Bank Secrecy Act, you must file a Report of Foreign Bank and Financial Accounts (FBAR), Form TD F 90-22.1. by June 30th next year.
Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both.
Last edited by Wnhough : 10-31-2010 at 09:34 AM.
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