So. Confused.

[kaberett]

I hereby do solemnly swear that never again shall complaint regarding Her Majesty's most noble Revenue & Customs be issued from my lips. Or, for that matter, my fingers.

Because, you see: THE IRS. WHAT. THE ACTUAL. FUCK. SO, SO CONFUSED. (Though in making this post I have maybe unconfused myself a little? Perhaps?)

SO. Caltech informs me that I am required to fill in Form W-4 for the purposes of witholding the correct federal income tax from my pay.

• I will be in the US for 10 weeks, earning $600/week (i.e. $6000 in total). This is my only source of income in the US for the coming 12 months. I have never previously visited the US; I do not expect to return until 2016 or thereabouts.
  
• Within the past 12 months, I have earned approximately £600, of which £24 will be in the 2011-2012 UK tax year.
  
• I do not expect my earnings to exceed £250 within the 2011-2012 UK tax year...
  
• ... because my loans from Student Finance England do not count as income, and nor does the money my parents give me to support myself...
  
• ... though I may receive up to £1500 in bursaries, which I do not believe counts towards my personal allowance (and in any case would not take it over the threshold).

I believe:

• that as far as the UK is concerned, my income is within the Personal Allowance, so I do not need to pay income tax, whether or not I pay tax in the USA
  
• that Article 20 (see below) of UK/USA Double Taxation Convention applies, but means that I do have to pay tax in the US because my payment does arise within the USA
  
• that I am a non-resident alien for US tax purposes
  
• that I cannot be claimed as a dependent by any US taxpayer
  
• according to p28 of Publication 519, I am able to claim only one personal exemption ($3650 in 2010)
  
• that as a NRA I cannot write "exempt" in line 7 of Form W-4
  
• that I may be eligible for exemptions from federal income tax withholding under the aforementioned UK/US Double Taxation Convention if I additionally file Form 8233
  
• that I therefore need to find out whether and how I am eligible to file Form 8233, BUT that this probably doesn't apply because of Article 20 (see above/below)

AND SO IN SUMMARY I believe that on Form W-4: I may and should claim a single personal income tax exemption; my home address should probably be in the UK. FURTHERMORE I BELIEVE that there is no point filing Form 8233, because I am ineligible under the aforementioned Article 20.

... does... does that sound plausible?

Article 20 reads as follows [my additions]:
Payments received by a student or business apprentice who is, or was immediately before visiting a Contracting State [USA], a resident of the other Contracting State [UK], and who is present in the first-mentioned State [USA] for the purpose of his full-time education at a university, college or other recognised educational institution of a similar nature, or for his full-time training, shall not be taxed in that State [USA], provided that such payments arise outside that State [USA], and are for the purpose of his maintenance, education or training. The exemption from tax provided by this Article shall apply to a business apprentice only for a period of time not exceeding one year from the date he first arrives in the first-mentioned Contracting State [USA] for the purpose of his training.

Comments

[evilsusan]

It's been a long time since I filed any US tax returns, but I recall you could choose not to have anything withheld. That would mean paying everything at tax time, but if you're not going to owe anything....

But yeah, the IRS is... ungood. You can ring them for advice, but you get different advice depending on who answers the telephone.

[kaberett]

And an astronomical phone bill! I don't currently have ready access to a landline...

I honestly can't tell whether or not I'm going to owe anything :-/

[crazyscot]

Before you said the bit about not having access to a landline I was about to suggest somebody like SuperLine for discounted international calling. Nevertheless you can still use them with a mobile to call the US for 2.5p/min + the cost of a call to London, so it might be a slightly-less-usurious fallback position: http://www.superline.co.uk/mobile.html

[rmc28]

You can come and use ours. We have cheap international calling with 18185 (1p/min, will take you ages to rack up the cost of a beer)

[keris]

Do you have a reliable net connection? (Reliable is more important than fast.) If so then SkypeOut has costs of around 1.4p/minute to the US (same as for Europe I think), rather a lot less than cellphone charges. And last time I used it (I don't have a landline at my lodgings) the audio quality was better than landline.