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A bit confusing to word the question, but I am a US citizen with a 5-year visa allowing me to work and live in the UK full-time (family member visa - wife is EU citizen).

I work remotely as an independent contractor for 2 US-based companies and work full-time in-house for 1 UK company.

I make 45,000GBP/yr (started in September 2018) and will end up with maybe $10k from my US work.

How would my income be taxed? Any info pointing me in the right direction would be much appreciated!

Thank you

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  • Similar/neardupe money.stackexchange.com/questions/101749/… Commented Nov 30, 2018 at 16:26
  • As the spouse of an EU citizen who lives in the UK, you do not require a visa to live and work legally in the UK. You will want to register for "settled" status or "pre-settled status," as appropriate, to continue to be able to live and work in the UK after it leaves the EU.
    – phoog
    Commented Feb 11, 2019 at 20:12

2 Answers 2

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Being a US citizen you have to file your taxes in the USA. All US citizens have to do that, even US citizens who have never touched the USA in your life. You might need a tax advisor, but likely you have to specify your income, minus taxes paid elsewhere, so you likely end up paying nothing or very little - but unlike most countries, the USA want their citizens to file taxes.

The UK will want you to pay taxes for money made in the UK. That is for money that you made while your body was physically in the UK. If you don’t start a limited company, you’ll have to fill out a tax return and tell HMRC about your foreign income. Not sure if it is all 100% legal, but as long as they are convinced they get their taxes, you will likely be fine.

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In general, if you are living in the United States and are a tax resident, then you pay taxes on foreign earned income no differently than domestically sourced income.

If you live in the UK for more than a certain number of days per year, then you may possibly exclude those earnings from your US income up to a defined amount which is about $100,000. If you are taxed by the UK, then usually you can claim a tax credit or deduction for those taxes against your US taxes.

If the income you receive is in a foreign currency, then the US dollar equivalent must be calculated using the spot exchange rate for that currency as of the time that you received the income.

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    If he keeps his accounts in pounds he can use the yearly average exchange rate when filing. irs.gov/individuals/international-taxpayers/… Commented Nov 29, 2018 at 3:59
  • Why the restriction on "living in the United States"
    – DJohnM
    Commented Nov 29, 2018 at 5:12
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    I would argue that since he lives in the UK and his primary income is from UK work that he needs to pay his taxes in the UK first and foremost. That being said OP should look at the US/UK tax treaty designed to avoid double taxation in situations like this.
    – Leon
    Commented Nov 29, 2018 at 7:11
  • For my contracting work, I receive US dollars which goes into my US bank account. My UK job pays me in GBP, which goes into my UK bank account. I have been working in the UK since September.
    – kd7331
    Commented Nov 29, 2018 at 9:07
  • To be clear, the foreign tax credit (or deduction) is available to both residents living in US with taxable foreign income that was subject to foreign tax and citizens living abroad with foreign income that was not excluded by FEIE (e.g. over the limit, or not living in a single place, or unearned) and was subject to foreign tax. Commented Nov 30, 2018 at 16:29

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