Taxes Are Taxing

I think tax issues are normally pretty annoying and complicated, but now it seems to have become doubly so now that I'm a US citizen living in the UK. Not only do I lose out on a significant amount of cash, but now I have to go through the whole rigamarole of figuring out who gets my money and how much and when. Lucky me, I get to be responsible for taxes in both countries.

But it turns out, I only have to file US taxes, and I don't have to worry too much about my UK taxes.

UK TAXES

If you're employed in the UK and don't have complicated investments, you more than likely do not have to file any tax forms in the UK at all. Under the Pay As You Earn scheme, your employer is responsible for ensuring that the proper amount tax is being withheld from each paycheck and you don't have to lift a finger come tax day. You will likely be taxed for National Insurance and Income Tax unless you hardly make any money at all (like moi). Now I just need to figure out how to claim the taxes back under my "personal allowance." Oh, and a word of warning - get a National Insurance number straightaway, preferably before you start working. Otherwise, your employer will assign you an emergency number, which means you'll get taxed at a much higher rate.

US TAXES

The US wants a cut of your earnings and the IRS demands that you file a tax return in the States as well for any foreign income earned. They provide you with an average exchange rate with which you're meant to translate your foreign earnings into dollars. http://www.irs.gov/businesses/small/international/article/0,,id=206089,00.html
The nice thing is that the US has a tax treaty with the UK so I think I receive a set-off for any taxes that I pay to foreign governemnts.

Another complicating matter is that in the States, married couples file joint returns, whereas in the UK, married couples file as individuals. Confused yet? I am. Especially in light of the fact that J's office has a tax service doing his taxes in the UK and the US, but I'm responsible for filing my own taxes. But since we're married, they'll be filing our joint US return for us, and I don't have to file any UK taxes under the PAYE scheme. So in the end, it all works out to very little paperwork for me. Yay!

Now, off to see the Queen about that tax refund...