What are the basics of Expat Tax for Brits living in the US?

As UK/US Expat Tax experts, we help 100s of monthly-retained clients reduce or mitigate Expat Tax in the US.

We also help ex-pats with property investment interests in the US to reduce their tax liability in the US.

An expatriate is an individual living and/or working in a country other than their country of citizenship.

This can be temporary and is often for work purposes.

An ex-pat can also be an individual who has given up citizenship in their home country to become a citizen of another.

Once classified as an ex-pat, you will be taxed only on US-based income.

This could include property investment income or stock revenue that is based in the US.

To meet the Physical Presence Test, you must be able to demonstrate to the IRS that you have been physically present in the US for 330 days or more during a 12-month period.

US citizens and resident aliens are subject to income tax on worldwide income. You may be looking to move to America as a British expat and need to decide on the right type of USA VISA, which we have written in a separate article.

If you are a US citizen or resident alien the rules set down by the IRS for filing income are generally the same whether you are in the US or abroad.

Your worldwide income is subject to US income tax, regardless of where you reside.

The Federal Earned Income Exclusion (FEIE) allows qualified taxpayers to exclude from taxable income up to $107,600 of earned income. More is written about FEIE in this article below.

The IRS has provided useful inputs on US citizens and resident aliens abroad which is worth reviewing.

17/08/2022

Moving from the UK To the US Where to payYour TAXES

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Moving from the UK To the US Where to payYour TAXES

Mohamed Aboshanab (Global Expat)