They allow you to stay "Tax Free" that should say, under 6 months a year and you are just a visitor and pay no US taxes... stay longer and its gets tricky
Tax Implications of Living Abroad
- Thread starter brandonbaker
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They allow you to stay "Tax Free" that should say, under 6 months a year and you are just a visitor and pay no US taxes... stay longer and its gets tricky
What the IRS Says about citizens living abroad
Think I understand what you're asking, and went to the source - IRS. First,
no matter where you "land" as a citizen you're on the hook for taxes. Period. No pass go, no collect jack!
Now about that foreign earned income exclusion..."If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($91,500 for 2010, $92,900 for 2011, $95,100 for 2012, and $97,600 for 2013). In addition, you can exclude or deduct certain foreign housing amounts." That means you pay your US federal taxes.
Be sure to have any accountant you use double check for 2015 changes. The IRS has up to April 14th at midnight to change the tax code (most people who file may get a nasty surprise because the changes can take affect up to and including the last day to file.)
If that bit about foreign earned income exclusions is confusing, right in the IRS publication it reads.."Requirements
To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements.
Your passport should show that you did not re-enter the US anytime during 2014 over a 24 hour period. Be aware the IRS takes that 330 full days seriously. You can split it any way you want, but you just can't break them up by being in the US over 24 hours, which is considered passing through on your way somewhere else.
Think I understand what you're asking, and went to the source - IRS. First,
no matter where you "land" as a citizen you're on the hook for taxes. Period. No pass go, no collect jack!
Now about that foreign earned income exclusion..."If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($91,500 for 2010, $92,900 for 2011, $95,100 for 2012, and $97,600 for 2013). In addition, you can exclude or deduct certain foreign housing amounts." That means you pay your US federal taxes.
Be sure to have any accountant you use double check for 2015 changes. The IRS has up to April 14th at midnight to change the tax code (most people who file may get a nasty surprise because the changes can take affect up to and including the last day to file.)
If that bit about foreign earned income exclusions is confusing, right in the IRS publication it reads.."Requirements
To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements.
- Your tax home must be in a foreign country.
- You must have foreign earned income.
- You must be one of the following.
- A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year.
- A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year.
- A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months."
Your passport should show that you did not re-enter the US anytime during 2014 over a 24 hour period. Be aware the IRS takes that 330 full days seriously. You can split it any way you want, but you just can't break them up by being in the US over 24 hours, which is considered passing through on your way somewhere else.
Here's the original post:
Stunning: US government calls 2% tax rate “extortion”
& here's UN Resolution 2023 attacking Eritrea:
United Nations Security Council Resolution 2023 - Wikipedia, the free encyclopedia
So this is coming from the US side? Meaning, if you legitimately did live in another country and then decided to visit your family in the US and your passport showed that you were in the US for more than 6 months, they would actually put out a warrant for your arrest?
Yeah... same goes for every country in the world. You can't just freely move to any country you want. You have to follow their immigration laws.
When you hit a foreign country, they'll stamp your passport, and that stamp tells you how long you're allowed to stay. Canadians get stamped in for 6 months when entering the US, which I think is the longest "visa on arrival" available in the world, at least that I've ever heard of. Between Western countries it's generally 90 days.
For example, if you hit the Thailand border without first obtaining a VISA from an embassy, you'll get stamped in for 30 days. If you stay longer and get your passport checked by the police sometime, you'll most likely get arrested, jailed, fined, and deported.
There's lots of Canadians who would love to retire in the US permanently, but they're not allowed, because they're only allows 6 months per-year. That would actually be a good solution to help your housing crisis. Offer a retirement VISA for any retired Canadian who drops $500k+ on a house in the US. Actually, maybe not. Many probably wouldn't go to due the healthcare in the US.
That's interesting to know. I always thought it would be relatively easy to buy property anywhere you could afford it and then stay there whenever you want. I guess that's wrong.
How about uber-rich people with houses in many different countries? Each time they go to stay at one of them, they constantly have to keep track of the exact number of days they can stay there before they have to leave the country?
Or is there an exception if you own property there? But then that complicates it again, because if you own property in multiple countries and you just stay at each one whenever you feel like it, where do you "live"? Do you pay taxes to every country? That wouldn't make sense, unless you're a pro tax evader.
^^ All depends on the country. Every country has different laws, and levels of enforcement.
For some countries, if you buy a nice enough house, they'll just give you permanent residency status. Other countries have investor VISAs (drop $x million into the local economy, get residency status), and so on. Some countries you just need to be a certain age with a certain $$$ amount in your bank account, and you'll get a retirement VISA.
Sometimes getting stamped in for another 90 days is a simple 30 min trip to fill up the gas tank. If you live close to a border, just head out, come back into the country 10 mins later, and get stamped in for another 90 days.
As for taxes, all depends on your country of citizenship. I know with Canada (and I think most other Western countries excluding US) you have to prove your a tax resident of another country. In order to be exempt from paying Canadian income tax, you have to prove you paid tax in another country. Otherwise, you're liable to pay Canadian tax.
For some countries, if you buy a nice enough house, they'll just give you permanent residency status. Other countries have investor VISAs (drop $x million into the local economy, get residency status), and so on. Some countries you just need to be a certain age with a certain $$$ amount in your bank account, and you'll get a retirement VISA.
Sometimes getting stamped in for another 90 days is a simple 30 min trip to fill up the gas tank. If you live close to a border, just head out, come back into the country 10 mins later, and get stamped in for another 90 days.
As for taxes, all depends on your country of citizenship. I know with Canada (and I think most other Western countries excluding US) you have to prove your a tax resident of another country. In order to be exempt from paying Canadian income tax, you have to prove you paid tax in another country. Otherwise, you're liable to pay Canadian tax.
OK so let me clear this up.
If you own a foreign corporation with a foreign bank account, then any earnings that you company makes are not subject to US tax unless you repatriate the earnings. Repatriate means bringing the money back to the US or investing in any US companies.
If you set yourself up as an employee of your own company and pay yourself that way, then you are an idiot, because you now are subject to double taxation. You are taxed at the rate of the foreign country for the company, and then your earnings you pay yourself as an employee are subject to US self employment tax.
So want to avoid US tax? All you have to do is set up a foreign corporation and have all earnings go to your business bank account in that country. Then pay the tax in that country and keep the money outside of the US. The only requirement is that you need to file that you have a foreign corporation with the IRS, otherwise you will be subject to an enormous fine if they find out.
I'm a tax accountant and do hundreds of these a year, so if you want more information or waited to the last minute to do your taxes and are desperate then you can hit me up.
God speed.
If you own a foreign corporation with a foreign bank account, then any earnings that you company makes are not subject to US tax unless you repatriate the earnings. Repatriate means bringing the money back to the US or investing in any US companies.
If you set yourself up as an employee of your own company and pay yourself that way, then you are an idiot, because you now are subject to double taxation. You are taxed at the rate of the foreign country for the company, and then your earnings you pay yourself as an employee are subject to US self employment tax.
So want to avoid US tax? All you have to do is set up a foreign corporation and have all earnings go to your business bank account in that country. Then pay the tax in that country and keep the money outside of the US. The only requirement is that you need to file that you have a foreign corporation with the IRS, otherwise you will be subject to an enormous fine if they find out.
I'm a tax accountant and do hundreds of these a year, so if you want more information or waited to the last minute to do your taxes and are desperate then you can hit me up.
God speed.
Frankly, for an American that wants to stop paying the IRS and still visit his family a couple months per year, I don't think you can beat Canadian citizenship.
As you can see from the map below, Canadians are the only ones that do not need a non-immigrant VISA to enter the U.S. Also, fingerprints are waived, live photo is waived. I actually enter the U.S. with my drivers license and it takes 2 mins to go through the border.
Sometimes I take the greyhound from Montreal or Toronto to NYC and I see all British/French/Asian nationals stay up to 3 extra hours at the border for additional paperwork and checkups.
Huh? Wasn't that phased out years ago? Didn't the US enact a law years ago that requires Canadians to have passports? Or did they maybe reneg on that, due to the trucking industry?
I don't know, I haven't lived in Canada for years. I remember back in the day though when I used to fly to California semi-frequently for clients, there was a new law already passed and by a certain date, all Canadians would be required to have a valid passport to enter the US. It was already a done deal, and this was back in 2005 or so.
That's not the case now?
You have been away for too long bro
Most provinces now issue an EDL, (enhanced drivers license) that allows you to enter the U.S.
Enhanced driver
That sounds incredibly simple. So:
1) Create company in other country.
2) Create company bank account in other country.
3) You're the sole owner/employee of the company, but you receive a $0 salary.
4) Company pays corporate tax rate in other country, you pay no tax in US where you live.
Am I getting this right?
If you suddenly move everything overseas and go from reporting 6 figure incomes to creating an overseas corp and reporting $0 incomes, can they not get you for tax evasion anyway? Since it's pretty obvious what's going on. Or is this some sort of silly loophole?
Also, if you live in the US you would obviously be spending money in the US, so if you spent it straight out of the overseas bank account would you be legally required to pay tax on the spent amount, ie. is it considered repatriation if I use a Singapore-based Visa to buy a meal at a restaurant in Los Angeles?
Of course it is considered repatriation. You think you're going to be living like a king in the States while claiming 0 income? Get real man.
Assuming you want to stay in the U.S., the only solution seems to be to make enough money to not care about giving a third of it away. The time and emotional costs involved to circumvent the U.S. tax code don't really seem worth it.
Not possible. Then again, you're in NYC, so you're probably already used to major tax ass raping.
OH, IT'S THIS FUCKING THREAD AGAIN.
HIRE A FUCKING ACCOUNTANT. ASK AARON KELLY IF YOU NEED A REFERRAL.
Jeebus fucking crust. Are you running a business, or what?
HIRE A FUCKING ACCOUNTANT. ASK AARON KELLY IF YOU NEED A REFERRAL.
Jeebus fucking crust. Are you running a business, or what?
That doesn't even sound like a big deal. You pay US taxes on your personal expenses and everything else is saved - sounds worth it to me.
Would there be any way to buy property in the company's name without having to pay the US income tax on the purchase amount?