Will the 2024 US Income Tax Changes Affect You?

everyone my name is Simon movich from M accountants and in this video I'm going to be talking about the 2024 US income tax rates so this is particularly important if you're moving from Spain United Kingdom or Canada into the US and thinking well how much tax do I actually pay anyway well we'll go into that now uh first thing you need to bear in mind is living in the United States you do pay tax on your worldwide income and gains so it's not just earnings that you're have in the United States you will also pay taxes on any earnings that you have investment or other if you've got United Kingdom Canadian Spanish whatever it is it will also be taxed in the United States which is really painful um Americans living abroad any Americans actually moving to the United States sorry moving from the United States I should say to the UK Spain or Canada you do need to bear in mind that you also have to submit your tax returns to the IRS on an annual basis and potentially have to pay tax taes to the IRS even though you're not actually living in the US um if you have us real estate income or business income again you will have to pay taxes to the RS and potentially the state as well for those activities that will be produced in the US some key dates for you to think about though is that the US tax system works on a calendar year so the 1st of January to the 31st of December that is their tax year here um you have different filing uh deadlines so you've got the 15th of April so if you're U us resident then you have until the 15th of April if you are abroad then you have an extended 2 months automatically apply to so you can file your us tax returns by the 15th of June if you file form 4868 which is an extension form you can actually submit your tax return instead of April or June but you could actually submit it on the 15th of October there is a disclaimer here and that disclaimer is that you have to still file sorry you have to still pay your US taxes to the IRS by the 15th of April so even though you've got these extensions of June and October if you have not paid your US taxes by the 15th of April you will pick up interest charges which is quite significant now with the increasing interest rates globally as a result it may still be worth you filing your tax turn by the 15th of April so you do not have to pay any uh late charges or payments of interest to the IRS it can be avoided therefore why not submit your text turn on time by the 15th of April all right some things to think about here is that you can file your us tax return as a married single person or a single person if you're not married at all or if you're married you can actually do a joint tax return which is quite unique to the United States because you don't have that ability in the United Kingdom for instance um you do get a taxfree amount of $14,600 as a single person or a married person uh fining singly or a US couple fing is 29,200 so again there may be some ways of saving tax depending on how you want to fire the tax rates then jump up according to the screen so you have a tax B from 10% 12% and 22% depending on how much money you earn means that you pay the more money you have the more taxes you will pay there is a 24% tax rate and then a 32 a 35 and a 37% tax rate so all of these tax rates need to be considered when you're filing your tax returns and how does that compare against Canada and the United Kingdom well they're not too dissimilar the United States you will pay more tax but there is a huge disclaimer on this point is that even though you might pay less tax on a high owner than the UK because in the UK you pay 45% for example 37% in the US you might think well actually much less of course that's not always true why because of state tax depending on where you are living in the United States you will pay an additional amount of state tax in in addition to the federal so Florida and Texas you have no income tax so the top tax rate is remaining at 37% so if you're moving from the United Kingdom you're high additional rate taxpayer paying 45% you do indeed save tax but if you are going to move to New York or California you could actually pay more tax by living in the United States than you could in the United Kingdom so it's not always fair to say us have lower taxes that's not true and we also have to bear in mind the cost of living in the United States is a lot higher as well so it's not always to your advantage by looking at the US and thinking it's some sort of tax havving compared to the UK [Music]