Have a Tax Question? Ask a Tax Expert
I would like to continue waiting.
continue to wait
Hi, This may not be a COMPLETE answer, as I am not a UK Tax expert, but on the US side, the following will be an important - if not pivotal- piece of the analysis:On the US return, because of the US tax treaty, there are - procedurally - two different ways to offset the taxes paid in the UK for the same year on your US return; (1) the foreign tax credit and (2) the deduction for taxes paid to another country.Typically, the tax CREDIT will work best, XXXXX XXXXX is a dollar for dollar reduction in the amount of tax owed. The tax DEDUCTION is a deduction FROM INCOME for purposes of figuring your tax.However, in SOME scenarios, one may work better than the other. And remember, choose to take either a credit or a deduction for all qualified foreign (non-US) taxes. What I would do is use turbotax or one of the other packages and run it both ways. It would be almost impossible to run all of the combinations and permutations in this venue, but hopefully this gives come context and a process...Here's the IRS guidance on the issue (but again, remember that turbo-tax, H&R Block - and your tax preparer for that matter - will generate the forms and schedules mentioned here for you ), if you just provide ALL the numbers.http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Tax-Credit---Choosing-To-Take-Credit-or-DeductionHope this helpsLane
If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.