Working offshore USA as a UK/US citizen
January 27, 2023 12:32 PM Subscribe
I have joint British and US nationality. I was born in the USA but have lived most of my life in the UK, and have never worked or lived as an adult in the USA. The last time I lived in the USA was in 1992, when I was 12 years old. Later in 2023, I am going to be working as a scientific researcher offshore (but close to shore, within US waters) for around 60 days, while being paid by my employer (a research organisation in the UK). I am stuck trying to figure out how I can do this without causing lots of problems either for my employer, or for me in terms of tax and visas.
Over the last few years, whenever I’ve visited the USA (just as a tourist) I’ve entered using my American passport and left using my British passport. I have a full time job here in the UK, and we don’t have to do our own taxes – my tax is automatically taken from my salary. I own a house with a mortgage and have some savings but no other assets or income. My salary is around £40k a year. I have a vague awareness that I’m supposed to do something about taxes in the USA even though I’ve never worked there, but I’ve never done anything about it. I do not have a social security number – my parents say I was never issued one - but I have a US passport and I’ve renewed it a couple of times without issue, so the consulate knows I live here (I think?).
My British and international colleagues are arranging for US visas to do this work, but I am unsure where to start. I’m a bit worried about potential problems. Can I just enter on my passport, do the work, and leave? What’s the worst that could happen? Should I contact my consulate? A lawyer? If I contact the consulate, might it cause me problems down the road because they know who I am now, or am I so insignificant it won’t matter? My organisation will help me if needed, but they’ve not had to deal with this situation before. They have lots of expertise in helping people from all over the world get visas, but apparently not dealt with joint USA/UK nationalities before. Any advice gratefully received.
Over the last few years, whenever I’ve visited the USA (just as a tourist) I’ve entered using my American passport and left using my British passport. I have a full time job here in the UK, and we don’t have to do our own taxes – my tax is automatically taken from my salary. I own a house with a mortgage and have some savings but no other assets or income. My salary is around £40k a year. I have a vague awareness that I’m supposed to do something about taxes in the USA even though I’ve never worked there, but I’ve never done anything about it. I do not have a social security number – my parents say I was never issued one - but I have a US passport and I’ve renewed it a couple of times without issue, so the consulate knows I live here (I think?).
My British and international colleagues are arranging for US visas to do this work, but I am unsure where to start. I’m a bit worried about potential problems. Can I just enter on my passport, do the work, and leave? What’s the worst that could happen? Should I contact my consulate? A lawyer? If I contact the consulate, might it cause me problems down the road because they know who I am now, or am I so insignificant it won’t matter? My organisation will help me if needed, but they’ve not had to deal with this situation before. They have lots of expertise in helping people from all over the world get visas, but apparently not dealt with joint USA/UK nationalities before. Any advice gratefully received.
This overview page from the IRS (the US federal tax collecting folks) might be helpful for you as a starting point. In a nutshell, US citizens who live and work outside of the US are subject to US income taxes, but there are exclusions if you make below a certain amount and are outside of the US for at least 330 days a year (you're below that income threshold). However, you're still supposed to be filing the taxes.
If you're in the US for 60 days, that might mean you don't meet the exclusion. Technically, though, you should have been filing taxes all these years, even if you didn't owe anything.
If you contact the consulate, they'll likely refer you to the IRS. I have heard that the IRS folks can be quite helpful. They might also refer you to a local lawyer or accountant who is well-versed in US tax law.
But, unlike DarlingBri's prediction, I am not going to tell you that terrible things will happen if you continue not to file taxes. At some point, if you work for an American company or move back to the US, it might be a gigantic hassle to catch up. I don't think they are going to arrest you at the airport for tax fraud.
I am curious as to why you have left the US as a British tourist. Why not enter and leave with the same passport? I would think they would want to look at the entry stamp when you go. But that's not relevant to taxes. You shouldn't need any special work permit or visa because you are a US citizen.
Regardless, I don't think you're going to be making any hassles for your employer, but maybe just for your future self if you do move to the US. Also, do you have kids or will you have kids who will want US citizenship? There's more to consider in that case.
posted by bluedaisy at 1:10 PM on January 27, 2023
If you're in the US for 60 days, that might mean you don't meet the exclusion. Technically, though, you should have been filing taxes all these years, even if you didn't owe anything.
If you contact the consulate, they'll likely refer you to the IRS. I have heard that the IRS folks can be quite helpful. They might also refer you to a local lawyer or accountant who is well-versed in US tax law.
But, unlike DarlingBri's prediction, I am not going to tell you that terrible things will happen if you continue not to file taxes. At some point, if you work for an American company or move back to the US, it might be a gigantic hassle to catch up. I don't think they are going to arrest you at the airport for tax fraud.
I am curious as to why you have left the US as a British tourist. Why not enter and leave with the same passport? I would think they would want to look at the entry stamp when you go. But that's not relevant to taxes. You shouldn't need any special work permit or visa because you are a US citizen.
Regardless, I don't think you're going to be making any hassles for your employer, but maybe just for your future self if you do move to the US. Also, do you have kids or will you have kids who will want US citizenship? There's more to consider in that case.
posted by bluedaisy at 1:10 PM on January 27, 2023
You may need to apply for a social security number - are your colleagues who are applying for visas getting SSNs as well? No idea whether that would put you on the IRS's radar but as DarlingBri says you won't owe any taxes since 40K is well below the taxable threshold.
As a US citizen you absolutely have the right to work in the US (and, presumably, just offshore of the US).
posted by mskyle at 1:12 PM on January 27, 2023
As a US citizen you absolutely have the right to work in the US (and, presumably, just offshore of the US).
posted by mskyle at 1:12 PM on January 27, 2023
You won't actually owe the US government any money — you are well below the threshold and even if you weren’t, you do not get double taxed. If you made a lot of money in a nation with low taxes, you might be on the hook, but you don’t. (Source: I am a US citizen living elsewhere who filed taxes above the automatic threshold this very year.)
If you are going to be paid in the US by a US entity, you should apply for a social security number because you’ll need it to be paid. Otherwise, you are entitled to be in the US however long you want to be and to do whatever, because you are a US citizen.
posted by dame at 1:33 PM on January 27, 2023 [1 favorite]
If you are going to be paid in the US by a US entity, you should apply for a social security number because you’ll need it to be paid. Otherwise, you are entitled to be in the US however long you want to be and to do whatever, because you are a US citizen.
posted by dame at 1:33 PM on January 27, 2023 [1 favorite]
You may need to apply for a social security number...
Given that they apparently lived in the US until the age of 12, and have a US passport, the chances are high that they (should) already have a SSN.
posted by Thorzdad at 1:34 PM on January 27, 2023
Given that they apparently lived in the US until the age of 12, and have a US passport, the chances are high that they (should) already have a SSN.
posted by Thorzdad at 1:34 PM on January 27, 2023
Bluedaisy: it's not the *leaving* that matters - it's which passport you present to the officer at the immigration counter. Their computer already knows you have both, the US border agents get pissy if you don't show them the US passport. As do the Canadian ones, can't speak to the UK case.
And annoying the immigration official is a good way to have a very bad day.
posted by cfraenkel at 1:36 PM on January 27, 2023 [1 favorite]
And annoying the immigration official is a good way to have a very bad day.
posted by cfraenkel at 1:36 PM on January 27, 2023 [1 favorite]
The UK and the US have a tax treaty whereby you’ll only have to pay taxes to one country. How the red tape works out in this case (have only done this between US and Canada and UK and Canada) I don’t know, but you should talk to a financial advisor
hrblock.com
Gov.UK
IRS.gov
posted by cotton dress sock at 2:57 PM on January 27, 2023 [1 favorite]
hrblock.com
Gov.UK
IRS.gov
posted by cotton dress sock at 2:57 PM on January 27, 2023 [1 favorite]
(I am not a lawyer or tax advisor. This would be a good question for an advisor qualified in US/UK cross-border tax.)
You are a US citizen so you are free to enter, stay, and work in the US without a visa.
Also because you are a US citizen, yes, you should have been filing US taxes and making FATCA declarations for overseas assets over $10K this whole time. Whether you would ever end up actually owing any US taxes is a different matter (and based on your description it sounds like you would not). Is it the end of the world that you have not been doing this? Probably not, I imagine the IRS has bigger fish to fry.
I think the questions of interest here are actually about what entity will be employing and paying you during this time. Will this be a temporary transfer to a US-based office of your employer? Or will your employer continue to treat you as working for the UK-based office, and your temporary worksite just happens to be near the US coast? If you will be paid a salary by a US-based entity then potentially you will need an SSN, which they will then use to automatically withhold US taxes from your pay as well as issue you a W2 statement of earnings and tax paid at the end of the year.
If this will all be processed through your UK-based employer entity it might actually be a complete non-issue as 60 days is not enough to meet the substantial presence test establishing US tax residency, although you should still report the income on the US taxes you are supposed to file annually regardless.
posted by 4rtemis at 4:29 PM on January 27, 2023 [1 favorite]
You are a US citizen so you are free to enter, stay, and work in the US without a visa.
Also because you are a US citizen, yes, you should have been filing US taxes and making FATCA declarations for overseas assets over $10K this whole time. Whether you would ever end up actually owing any US taxes is a different matter (and based on your description it sounds like you would not). Is it the end of the world that you have not been doing this? Probably not, I imagine the IRS has bigger fish to fry.
I think the questions of interest here are actually about what entity will be employing and paying you during this time. Will this be a temporary transfer to a US-based office of your employer? Or will your employer continue to treat you as working for the UK-based office, and your temporary worksite just happens to be near the US coast? If you will be paid a salary by a US-based entity then potentially you will need an SSN, which they will then use to automatically withhold US taxes from your pay as well as issue you a W2 statement of earnings and tax paid at the end of the year.
If this will all be processed through your UK-based employer entity it might actually be a complete non-issue as 60 days is not enough to meet the substantial presence test establishing US tax residency, although you should still report the income on the US taxes you are supposed to file annually regardless.
posted by 4rtemis at 4:29 PM on January 27, 2023 [1 favorite]
The $10K threshold is for FBAR, not FATCA, I think.Yes, my mistake. FBAR is the regulatory scheme for that.
posted by 4rtemis at 5:57 PM on January 27, 2023
And I strongly second praemunire's advice to consult with a qualified advisor about this. Regulations in this area are complex and compliance is not intuitive.
posted by 4rtemis at 6:13 PM on January 27, 2023
posted by 4rtemis at 6:13 PM on January 27, 2023
This thread is closed to new comments.
Why are you anticipating anything bad happening? You are a US citizen entering the US. You don't need a visa or anything special.
You do not even owe taxes on 40K worth of income, it's below the taxable threshold for overseas earnings.
And FWIW I'm sure Metafilter will line up to explain to you how this is illegal and how if you don't file, Terrible Things Will Happen, but they will not. I live in Ireland, I used to live in the UK, I've not filed taxes in the US for 20 years, and I never will again. I don't owe them any money and my finances are none of their business.
PS: Do not ever tell any UK bank, building society or mortgage lender you are a US citizen, they are required to report your earnings to the US government under FACTA and you do not want that. My bank account predates FACTA, they've never asked and I'm not saying shit.
posted by DarlingBri at 1:00 PM on January 27, 2023 [4 favorites]