In this first part of our four part series Jimmy Sexton, LL.M. discusses the Foreign Earned Income Exclusion, Foreign Housing Exclusion/Deduction, Foreign Tax Credit and Form 8938 (FATCA).
"You are allowed to earn $99,200 tax free""Just to clarify, this is NOT tax free. It is taxed where you live and work just like everybody else and usually at a higher rate than the USA would. Should you exceed that, your US tax liability is in ADDITION to the taxes you pay locally. USA needs to get with the program the rest of the world and quit taxing people who don't live there.
***** Well, I just sold all my US Dollar investments. I feel that strongly about the shocking behaviour of the USA and the imposition of FATCA on the world. I hope many others follow suite.
The U.S. will never not tax citizens living abroad instead of taxing residents. That because they are bullies who consider themselves world police, and they're broke because of bush's fucked up economic policies, now obama has enacted these byzantine and draconian laws.
Anonymous That they are bullies is clearly beyond all doubt. To force the entire world to implement immoral US law in their countries at the point of a financial gun is also clearly not the act of a friend, either. Of course, nobody sits at the point of a gun for long without looking for alternative places to sit, hence the US dollar is screwed now the entire world is incentivised to look elsewhere for a safe currency. In the meantime, the good folk of the USA are still convinced they have freedom like no other citizen of any other country on the planet. My claims that they are no longer free to leave and tracked like no other on earth are met with cries of BULL SHIT! Sadly for them, it's not. And the sad thing about it all? The net gain of their immoral taxation policy is very likely to be nil, or less once you take the damage caused in to effect. How does a country export when it citizens cannot live overseas? Very badly.
Mike Breen Over 6 million U.S. Expats and less than 20% of them ever file a tax return, let alone pay any U.S. taxes. The IRS simply does not have the means, capacity or power to go after everyone. I knew a few Expats living in france who have lived there for 30 years, who say they've never once filed u.s. tax returns and don't care. But it doesn't mean they can't nab you later...
Anonymous 30 years ago was another world, this is the FATCA world. Is that the same France where French banks were recently simply closing the accounts of any customer with "US indicea"? The effects of FATCA on Americans overseas runs far deeper than the direct actions of the IRS. Apart from the intimidation telling on family ties, a whole range of financial services are simply being refused to Americans as the companies involved seek to avoid FATCA reporting. Here in Belgium a work bonus gets paid via a SICAV for tax reasons. Closed to Americans, so he gets paid via payroll, extra tax before the USA even holds out a hand. The list of problems this is causing is almost endless. As to what the IRS will do with all the information they will be sent, I suggest it won't be ignored. Certainly, I expect a huge drop in Americans returning home for any reason out of fear, just as I predict the lines for renunciation will continue to grow despite US attempts to stem the flow by making it more difficult and expensive. Also, for those who think that despite the problems the USA is causing in these Americans adopted homes, they will be simply free to ignore the financial demands as they are unenforceable, they might like to take a look at the OECD proposals of cross-border assistance in the collection of taxes which is very heavily pushed by.......guess who?
My question to Jimmy Sexton ...I am a dual US/Egyptian Citizen and have moved back with my Family 16 years ago to Egypt...I have inquired more than once with Tax filing services in the USA about the need to file income tax and was told that i did not need to unless i earned more than $10,000/Year which i did not ....Any chance you can help clarify this issue for me in light of these new procedures ...Thanks
Hey, thanks for the information. I am US citizen that moved to Canada mid-last year and worked here in Canada starting in October 2017. Should I declare my Canadian income even though it is not equal to $99,200? Thank you for your response.
Thanks for the wonderful information. I have few quick question 1. Can a US citizen work on 1099/ Corp to corp/W-2 for a US client while staying abroad.
You say the exclusion only applies if you are considered a resident of the foreign country. What if you are simply a long term tourist (2-3 months; no visa) working online for an American company. How would that work tax-wise? I'm hoping to work online while I need to be in Korea, but this tax situation is very confusing to me. I just want to do things the "right" way, but it seems complicated.
Living abroad for only 2-3 months would be too short of a time to qualify for any exemption. You do need to be careful, however, that Korea won't want to tax while working from there. These situation can get quite complex. If you'd like to get some advice specific to your situation, please feel free to schedule a consultation by emailing us at info@esquiregroup.com
My question to Jimmy is , I am us citizen living in southAmerica, and I need do the taxes from 2012 to 2014, I never filed taxes before, and I know i will qualify for the exclusion using 2555, and my returns show zero balance, but I never filed extension, is any penalties involve ? Any ways to void the penalties? Thank you . Gloria
Thanks for the information. Question: My wife received a gift actually it was an inheritance from her father who was a dual citizen (US and South America). He was living in South America at the time of his death. She wired the money cash only (no properties involved) back to US. Since he is a US citizen will 3520 still be the correct form?
Hello davidxroxy. Sorry to hear about the loss of your wife's father. Thank you for your question. I wish this was as simple as a yes or no answer; even the smallest details matter, and we do not want to steer you in the wrong direction. Let's cut through the nitty-gritty with a tax evaluation so that we can be confident in the information we are providing you with. Please head over to esquiregroup.com and submit a request for a tax evaluation, so that we can dig deep into any possible tax obligations, as well which forms may need to be filed.
I am self employed and planning to move abroad. If I understand correctly, are you saying I have to pay self employment tax no matter what, no matter where I live? But what if I were to create a 2nd business offshore while living abroad, would I also have to pay taxes on that income or could my 2nd business fall under one of these exemptions?
Yes, if you are self-employed, you are liable for US self employment tax no matter where you live unless the country where you live has a totalization agreement with the US and you are able to get a certificate of coverage from that country saying you are covered by their social security system. There are, of course, options to try to reduce or eliminate self-employment tax but there is a lot to consider and can't be addressed in the comment to a RU-vid video. If you'd like to setup a consultation, we'd welcome the opportunity to assist you with this matter. Please email us info@esquiregroup.com to setup a consultation. Thanks!
This made no sense to me😂sorry it’s way too wordy. So if I was tell sell my house in a foreign country would I have to pay tax to the us as I would be getting a large amount of money?
I would need more information to answer this definitively. Generally, however, the answer is yes. If you would like a definitive answer, the best thing to do would be to setup a consultation with us by contacting us at info@esquiregroup.com
Who can I talk about about paying taxes in japan as a US citizen working as a self employed contractor where I have to pay all of my own taxes and health insurance and my company won’t do it for me. I’m so confused 😑😑😑😑I don’t wanna pay thousands of dollars or to go prison!!!!
We can help you with the US tax side. Please email us at info@esquiregroup.com to schedule and consultation. Unfortunately, we don’t have anyone who can assist with the Japanese side.
Hello... I'm U.S citizen and living in south america ... I file tax every year when i was living in the U.S but I moved here in 2015 and did not work the whole year and still not working ... My question is...Do i still have to file taxes????
what about if you are a us citizen born in another country with one parent from u.s. ? only father , born in another country live all your life in another country. do you have some obbligations with us ?
Possibly. It depends on several factors. Please contact us at info@esquiregroup.com to setup a consultation so we can get more info from you in order to answer your question.
no bro, but you being married to your american wife can never run from the American IRS. Trust me i know. Im not sure about Europe but in canada I had to sign a form called W9 so the IRS knows how much money I have in the bank account. The best way is to have different bank accounts from your wife or else your fucked.
Thank you for your comment. We have offices in Europe and can assist in advising you and your wife as to US tax obligations, as well as preparing the necessary filings. We also work with local tax partners in most European countries who can support you for local tax matters. If you’d like a consultation to discuss, please email us at info@esquiregroup.com.
Switzerland is my country. I know about the W9 because right now i am in the US with a L1 visa. We are getting married soon and we are considering moving back next year. Thank you all for your answers.
