Thomas LR Griffiths is a tax advisor and consultant specializing in US expatriate tax matters. Thomas explains the role of tax specialists and why they are crucial today.
Tax specialists help people file and manage individual and business taxes. A tax advisor can be helpful not just for those currently in work but for retired individuals too.
The daily tasks and objectives involved in the job of a tax specialist may vary depending on their client’s needs. Generally, they revolve around ensuring taxes are filed correctly so that the client can pay less and get professional guidance on managing their taxes in the future.
Expats are among the most likely to need the assistance of a tax specialist since they must navigate the tax laws of at least two countries. US expats are required to file taxes in the United States even if they aren’t residing there, which adds an extra layer of complexity to managing taxes.
Those considering hiring a tax consultant are doing so for a purpose. Ultimately, most people hire a tax specialist because they are uncertain how to manage their taxes alone or effectively.
There are many different tax regulations and relevant forms involved in filing taxes. It is not as simple as passing along your earnings and paying a portion of those to the government, especially if you are a US expat living in the UK.
The first stumbling block for most US expats living in the United Kingdom is where to pay taxes. HMRC in the UK is likely to tax you, depending on how long you reside in the country, but the IRS will still require you to at least file your taxes with them, even if you haven’t been living in the States for years.
Tax treaties, credits, and deductions are available to US citizens abroad. The trick is knowing what is available and which best suit your situatio. A tax consultant specializing in US/UK laws, such as Thomas Griffiths, can assist with this.
Tax specialists can assist you whether you are looking to minimize next year’s tax bill, want to understand how upcoming changes in your personal, professional, or legal life will affect your taxes, or want to review a previous tax return.
A tax specialist is responsible for more than just filing taxes. They are also tasked with preparing and maintaining all related paperwork for processing.
Experts like Thomas Griffiths can offer specialist assistance with expatriate tax matters. Those with experience and practice in the field, particularly in dealing with world tax trends, are ideally positioned to handle expatriate taxes.
Communication skills and attention to detail are invaluable for a tax consultant. Beyond this, a tax specialist should also have excellent problem-solving skills. Taxes aren’t always straightforward, and a minor change could affect the legality of a tax return or the best method of filing.
Tax specialists like Thomas Griffiths have training, experience, and knowledge of tax law, auditing, accounting methods, and accounting software. They must also have experience dealing with the IRS.
Aside from these skills, there are several qualifications a tax consultant must have in order to fulfill their role. These include a university bachelor’s degree in accounting or another finance-related field. They should also have a CPA certificate as an enrolled agent and be a member of the ATT.
Familiarity with HMRC and the IRS is also necessary for those working with US expats living and working in the UK. Experience working with the two country’s tax systems helps guarantee taxes are filed correctly and smoothly.
Most UK residents can get by without a tax specialist since HMRC automatically deducts the required amount from employer and employee. However, the taxation system in America works differently, and unlike almost any other country, the US taxes requires its citizens to file taxes regardless of where they reside.
US expats, therefore, must juggle the demands of the IRS and, for instance, HMRC. In addition, expats must ensure they file correctly in both countries, and they may be subject to severe fines.
From workers at major companies to business organizations and even retirees, all US expats must file taxes with the IRS. Whether you have been living in the UK for many years or have recently moved, finding a streamlined procedure for filing US taxes is essential.
Those filing their taxes themselves or with a consultant not specialized in US and UK tax laws may fall victim to the various US expat tax myths and misunderstandings. They could end up paying more than they should or even facing fines because of filing errors.
The US has a double tax treaty with several countries, including the UK. This treaty prevents US expats from being taxed twice by the US and the area where they are residing. The situation can become even more complicated if, for example, a person is an American citizen living in the UK but owns property in the US. Therefore, a tax specialist with experience is essential in advising on more complex financial situations.
For expats who have made or are planning to make a foreign country their home, you will need to learn the term domicile. This is generally a legal concept, and a person may be classed as a domicile of the place they were born or later made their permanent home. Domicile is more permanent than residency and may not be the same as a person’s residence, citizenship, or nationality.
Tax consultants can support someone in determining their domiciled status and advise on making a correct determination. Once your domiciled status is decided and claimed, a tax specialist like Thomas Griffiths can also offer guidance on the best choice for your situation.
Taxes around domiciled and residence status can be confusing and multi-faceted. If you are interested in changing your status, you should consult with a tax specialist first to ensure you understand the full range of your options.
So, you know what a tax specialist’s responsibilities are and the overall reason you might hire one. Now let’s look at the specific assistance consultants like Thomas Griffiths offer to decide if hiring one is the right move for you.
Did you know that foreign-earned income can only be excluded from US taxes up to $112,000 in 2022 or $108,700 in 2021? You must also have spent at least 330 days of the year outside of the US.
A tax specialist is aware of all these details, among others, and can help you to navigate issues like the amount of time you spend visiting family in the States or how you structure dividends. A tax specialist can even consult on what happens if a spouse doesn’t move with you or if they also find work in the UK.
Consultants can advise on the tax implications of your life and decisions. They can help you tailor your plans in a way that works for you personally and in terms of taxes.
Your situation may change from year to year. Perhaps you have recently started or are planning to start a job with a much higher salary. Maybe you are selling or purchasing a home, other assets, or stocks. Many things, both big and small, may affect your taxes.
A tax specialist will assist you in understanding what these changes mean for your taxes. For example, if a new job or salary will alter your tax liabilities. A consultant will analyze the situation and future changes to inform you of how much you will owe and how you can reduce your tax bill according to your new position.
Are you worried that a previously completed tax return was wrong? Perhaps you think you overpaid but are uncertain and don’t know if you can change what is done. These are not uncommon complaints among individuals who file their own taxes. But such situations can also occur if the taxes were filed with a tax firm with no special knowledge of international tax regulations, particularly for US expats living in the UK.
The good news is that tax specialists can help review a past tax return. If something is amiss, the consultant can file an amended return after discussing matters with you. Among these amendments, a tax specialist may add credits or deductions, correct errors, or file missed forms.
Currently, reviews can only be carried out on forms filed within the last three years. Therefore, you must contact a tax specialist without delay if you are worried about mistakes or missed opportunities in a filed tax return.
Not everyone needs to work on a one-to-one basis with a tax specialist. But this is not the case for many people. A tax specialist can provide essential assistance and insight.
Look at some of the core pros and cons of working with a tax specialist to see if hiring one is right for you.
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A tax specialist can transform your taxes. However, remember that you should check reviews and speak with the firm or consultant before handing over your expat tax matters to them. Doing so will ensure you get the help you need from those you can trust.
