Top 10 things a UK citizen needs to know about filing US taxes. 

Filing taxes can be a daunting task, especially as a cross-border individual. The US tax system has many complexities and navigating these can be challenging without proper guidance.  

Whether you’re a citizen, a green card holder, or considered a US resident for a particular year, here are the top 10 things UK citizens need to know about filing US taxes: 

1. Tax Filing Requirements: All US citizens and green card holders are legally required to file US taxes every year, regardless of where they live. This includes those who are living and working abroad and those who have no US-based income. This means that if you are a UK citizen with US citizenship, you will need to file US taxes annually, regardless of where you are living or working in the world. 

2. Tax Status: UK citizens who are living in the US on a visa or work permit are also required to file US taxes, even if they are only earning income in the UK. They may be considered “resident aliens” if they meet the substantial presence test, and therefore must report income to the IRS. Non-US resident aliens may also be required to file a non-resident tax return to report any US-sourced income.  

3. Filing Thresholds: Unlike in the UK, US citizens are given different filing options depending on whether they are married or considered single. Each filing status has its filing thresholds, tax rates, and deductions to reduce tax. Carefully evaluating your marital status, dependents, and household situation can help optimize your taxes.   

4. Filing and Payment Deadlines: The deadline for filing US taxes is April 15th for individuals who are resident in the US, and June 15th for individuals residing in the UK. Both of these deadlines can be extended to October 15th by filing for an extension. However, individuals should be aware that the payment deadline remains on April 15th for all US people and should therefore seek to make estimated payments if they are not ready to file their returns. It is important to file your taxes on time to avoid penalties and interest charges. 

5. Double Taxation: UK citizens may be subject to US taxes on income earned in the UK, as well as any income earned in the US. This can include income from employment, self-employment, investments (including ISAs), and rental properties.  

6. Tax Treaties: The US-UK tax treaty may provide relief from double taxation for UK citizens living and working in the US. This treaty ensures that income is not taxed twice, only in where the country that has the primary taxing rights and can offer a foreign tax credit to the other.  

7. Informational Filings: UK citizens may be required to file additional forms, such as the Foreign Bank Account Report (FBAR) if they have financial accounts overseas. This form is required if the total value of your foreign financial accounts exceeds $10,000 at any time during the year. 

8. Record Keeping: It is important to keep accurate records of all income and expenses, as well as any foreign tax paid, to file US taxes accurately. This can include receipts, bank statements, and other financial records. 

9. Tax Credits and Deductions: UK citizens may be eligible for certain tax credits and deductions on their US tax return. Common credits include the Foreign Tax Credit, which can help reduce their US tax liability from foreign taxes paid, and the Child Tax Credit. Deductions may include those for mortgage interest paid, qualifying charitable contributions, and medical expenses. These credits and deductions can help offset any taxes paid in the UK and the US. 

10. Seek Professional Advice: It is recommended to seek the advice of a tax professional with experience in US-UK tax matters when filing US taxes as a UK citizen. US tax laws can be complex, especially for expatriates. US tax professionals can help ensure you are filing correctly and taking advantage of any available tax breaks.