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My partner and i are not married, i am a US citizen, he is a UK citizen we have 2 children (3.5 and 2 years old) - the children are both UK citizens.
We are relocating to LA and wanted to ask about taxation and tax status.
My Partner will be working for a company in LA under an L1-B inter company transfer VISA
We have read about filing taxes and that you have to do so each year. But when the IRS makes it's deductions from your monthly / bi monthly paycheck, will he qualify as head of household?
My partner will be the only one working in the US and will be supporting me and the 2 children. I will have some rental income from my UK house that I let out in the UK, but I believe i can pay tax on that in the UK and not in the US.
Your children are dependent upon your partner for their support and for the maintenance of the household in which you all live, therefore he can claim "head of household" at tax time.
As for the bi-weekly or monthly deductions from his wages, when you go into the payroll office you can claim whatever status you want - legally it doesn't matter. What will matter is that the deductions come reasonably close to the amount of tax due on April 15. If you are too far off the mark you will either make a large interest free loan to the government, or the government will penalize you for underwithholding. Do your own math beforehand, and then choose the amount of exemptions on your W-4 that works best for you. The instructions that guide you towards a certain number of exemptions are there just to help you get it right, but if your situation is substantially different from the norm, choose your own number. However, from what you've said, your situation sounds pretty typical financially.
Now, on this following point I'm mostly guessing, but technically I think you will have to pay US tax on your UK rental income. However, you will get a deduction from your US taxes from what you end up paying to the Exchequer. Review the rules for Form 1116. They are diabolically complex.
It does not matter what you claim during the year, it only sets a base of what is removed on each paycheck for taxes.
You really want to be honest when you file if you are here as a guest. This could really be a Visa problem.
There is a place on the IRS website where you can estimate your current income and it will help you to determine how many deductions to claim. Be aware that you will also have to pay State tax in California which is up to 9% of your income.
If you earn income in the UK and don't bring the money into the US you may not have to pay tax. You should consult a tax accountant on that one.
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