Defining expatriate

BCTAv8r

Well-Known Member
If you are an American citizen as well as citizen of country X, and you go work in country X are you still considered an expatriate for U.S tax purposes? Do you still pay taxes in country X considering that you are a citizen?
 

fsiflyer

Well-Known Member
If you are an American citizen as well as citizen of country X, and you go work in country X are you still considered an expatriate for U.S tax purposes? Do you still pay taxes in country X considering that you are a citizen?
In my former life of being an accountant I'm itching to answer your question in a long winded note, but....

in all honesty seek out professional licensed (certified) tax advice. The kind of advice that will stand the scrutiny of federal regulators...mainly the IRS. Good luck.
 

BCTAv8r

Well-Known Member
In my former life of being an accountant I'm itching to answer your question in a long winded note, but....

in all honesty seek out professional licensed (certified) tax advice. The kind of advice that will stand the scrutiny of federal regulators...mainly the IRS. Good luck.
Thanks. I don't really need this info ugently. Was just curious.
 

374566

New Member
[FONT=Arial, Helvetica]I got this directly off of the website for Global Tax Help.

U.S. Income Tax Obligation while Living Abroad

As a U.S. expatriate residing abroad, you have a legal obligation to file U.S. tax returns each year on your worldwide income. GlobalTaxHelp.com is pleased to provide you with the below information about expatriate tax basics. For more personalized answers to your expatriate tax questions, feel free to request more information—there’s no obligation.


Foreign Earned Income Exclusion

If you are a full time resident abroad for a full calendar year, or live there for 330 days out of any consecutive 12-month period, you can exclude up to $80,000 of earned income from U.S. Income Taxation for 2003, 2004, and beyond. If you are married, and both of you earn income and reside abroad, you can also exclude up to another $80,000 of your spouse’s income from taxation. These exclusions can only be claimed by filing a tax return and are not automatic if you fail to file your Form 1040 for the year it applies (as well as the appropriate forms claiming this exclusion). Earned income is income you earn for your work or services and does not include rental income, dividend or interest income, or other types of income that are not paid for your own personal efforts. You can also claim an additional exclusion or deduction for your foreign housing expenses exceeding a standard amount established by the Federal Government.


Foreign Tax Credits

You may have income for which you’ve paid foreign tax, but that cannot be excluded from U.S. taxation. GlobalTaxHelp.com can help you to claim Foreign Tax Credits that can be used to partially or completely offset U.S. taxes that accrue on this same income. In higher tax countries, you’ll accrue such tax credits faster than you’ll ever be able to apply them; in lower tax countries, you will likely be able to apply most or all such tax credits against U.S. tax liability on this same income.


U.S. Tax Treaties with over 60 Countries

The U.S. has Tax Treaties with over 60 other countries. A Tax Treaty is complex and includes many provisions that can benefit any U.S. taxpayer. Tax Treaties codify the objectives of reducing or eliminating double taxation of your income by both countries via reciprocal foreign tax credits (see previous section). Individual tax treaties also address tax issues specific to the two countries involved. If you file your tax return each year while living abroad, the statute of limitations for IRS audits will expire three years after you file those returns. That means the IRS cannot go back (unless there is evidence of fraud) and attempt to audit or change those returns later. You may want to consider filing your return even if you have no income or don't owe taxes in order to force the statute of limitations to run out, thereby eliminating any future problems when you decide to return to the U.S.


U.S. Social Security, Medicare, and Self-Employment Taxes

If you are an offshore employee of a U.S. corporation, that employer will normally withhold Social Security and Medicare taxes on your W-2 earnings. If you are working for a U.S.-based employer in one of the 20-plus countries with which the U.S. has established a Social Security Totalization Treaty, you may cite a closer connection to the foreign country and participate in that country’s social insurance system, and not have U.S. Social Security and Medicare taxes withheld from your U.S. pay.

If you are a bonafide employee of a foreign employer and are subject to foreign laws governing their social security tax, you are not required to pay U.S. Social Security tax.

If you are self-employed (an independent contractor), you are obligated to pay, in addition to your income tax, a U.S. Self-Employment tax that is both employer and employee’s share of Social Security and Medicare taxes. You must file a Schedule C with your U.S. tax return and pay U.S. Self-Employment Tax on your net earnings by filing a Schedule S-E. The Self-Employment Tax rate is 15.3% of net Schedule C income before any foreign income exclusion and the taxable net self-employment rate is not reduced by the previously mentioned foreign tax credits. Net earnings are income after all legal business expenses are deducted and include the income earned both in a foreign country and in the United States.


TS
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PWMURPHY

Well-Known Member
The best advice has already been given: get a good accountant who has experience with overseas income. This is not a field to leave to H&R Block or Turbo-Tax or even to your own research.
PM
 

mshunter

Well-Known Member
So let me get this striaght. If you are a US citizen, and live outside the US, lets say you live in, ummm, Nigera, you still have to pay US taxes, even though your employer resides in Nigera, and you also live in Nigera?:confused:

If this is true, thats total BS!
 

fsiflyer

Well-Known Member
So let me get this striaght. If you are a US citizen, and live outside the US, lets say you live in, ummm, Nigera, you still have to pay US taxes, even though your employer resides in Nigera, and you also live in Nigera?:confused:

If this is true, thats total BS!
YES! It may be BS but that's just the way it is.
 

typhoonpilot

Well-Known Member
So let me get this striaght. If you are a US citizen, and live outside the US, lets say you live in, ummm, Nigera, you still have to pay US taxes, even though your employer resides in Nigera, and you also live in Nigera?:confused:

If this is true, thats total BS!

One of only three countires in the world that have this rule. Pretty amazing huh?

If you feel strongly about how wrong it is then read this and act on it:



This effort is sponsored by the Middle East Council of the American Chamber of Commerce (MECACC), and the website communication feature is funded by the American Business Association – Eastern Province (ABA-EP), Kingdom of Saudi Arabia.

AN URGENT CALL TO ACTION

An Open Letter to Taxpaying Americans Working Internationally

SUPPORT REFORM OF SECTION 911

We need your help, and you can help. U.S. Citizens abroad represent a substantial and decisive voting block. In 2000 our votes in Florida decided the outcome of the presidential election. Let’s use our influence once again correct an injustice that affects all of us who work internationally!

Americans working overseas are America’s vanguard in the global marketplace but Americans working abroad face an uphill battle. We are taxed on the basis of citizenship rather than on residence. That makes us very uncompetitive and very expensive to employ internationally. We need to pull together to reform the Foreign Earned Income Exclusion (FEIE), Section 911 of the U.S. Tax Code, and level the playing field for Americans to compete on an equal footing.

For the first time, we have bi-cameral, bipartisan legislation in the U.S. Congress: “The Working American Competitiveness Act” (S-1140) sponsored by Senator Jim DeMint (R-SC), and (H.R. 4752) sponsored by Congressman Gregory Meeks (D-NY). (See list of cosponsors below)

The FEIE was severely crippled by an eleventh-hour rider in the Tax Reconciliation and Prevention Act (TIPRA) passed in May of 2006. This legislation would not only reverse that damage, but it would increase the amount of the foreign earned income exclusion to compensate for the prolonged absence of inflation adjustments. The FEIE is at the same level it was in 1986.

We have a third supporting piece of legislation “American Tax Fairness Act of 2008” (H.R. 6614) Congressman Scott Garrett (R-NJ) which contains the same text as S1140 and HR 4752, but also includes a requirement for the U.S. Treasury to produce within 1 year a report on the United States Taxation of foreign income.

We urge you to contact Congress today and support S 1140 in the Senate and H.R. 4752 and H.R.6614 in the House. Copy and paste this link Middle East Council of American Chambers of Commerce | Global Coalition of Americans Dedicated to Restoring American Trade Competitiveness in a 21st Century Economy -- Legislative Action Center into your browser and let your voice be heard!

Americans Working Abroad = U.S. Exports = Jobs at Home

The United States is the only developed country in the world which taxes its citizens working internationally in this manner. Because of America’s unbalanced and counterproductive tax policy, Americans are either choosing not to work overseas, or they are too expensive for overseas companies to employ. As a consequence, our nation is handicapping itself in the global economic competition. This problem is serious today, and it will only become worse as globalization continues its relentless march into the future.

With a soft dollar, American exports are currently in high demand. With the weak American economy, more Americans are seeking work outside the U.S. But high exports and a strong base of taxpaying Americans working abroad are not economic conditions which are likely to endure. With the probable return of a strong U.S. dollar and economy, there likely will be fewer Americans choosing to work abroad because of a reduced financial incentive to accept the risk and inconvenience of living and working away from the comforts of home and, often, family.

Without Americans working in influential international positions such as purchasing, contract management, and project management, other nations either will fill, or are now filling, those vacancies. They will order products produced in, and services available from, their own countries. The Germans, Chinese, Russians, French, Italians and a whole host of other nationalities are aggressively replacing Americans in many key business positions and on many lucrative contracts around the globe, because U.S. tax policies have weakened American international competitiveness and have reduced the attractiveness of Americans as international employees. By pulling together, we can reverse this negative economic trend. Visit Middle East Council of American Chambers of Commerce | Global Coalition of Americans Dedicated to Restoring American Trade Competitiveness in a 21st Century Economy -- Legislative Action Center .

Over 30 years ago, Congress designed and enacted the Foreign Earned Income Exclusion (FEIE) (section 911 of the U.S. Tax Code) as a tax incentive for Americans and their families to leave the comforts and security of their homes and families to work abroad. Earlier Congresses understood the essential front-line role working Americans played in global competition, and wanted to ensure our front line stood strong. Unfortunately, over the past 20 years the FEIE has been a constant Congressional target for dilution or elimination. In May 2006 TIPRA punched a hole below the FEIE water line and reduced by over half its financial benefit to working expatriates.

As an inevitable consequence, the FEIE, intended by Congress to benefit America’s global workforce, was severely devalued as an effective economic tool to persuade Americans to work overseas, or to retain them if they were already there. American workers or their foreign employers now pay twice as much in taxes as they paid prior to January 2006 (the law was retroactive). And the law affects all ordinary income for qualifying Americans working internationally. The predictable result is fewer Americans in influential business positions, and equally educated, less expensive workers from other countries literally flooding in to fill those positions.

One of the hardest hit sectors is education. American educators, who once taught at American secondary schools or universities around the globe, suddenly faced with a doubled tax burden, have left their classrooms and returned home. This is especially troublesome in the Middle East, where American values are frequently questioned. Rather than engaging in a vigorous cultural debate, American educators have been forced by our government’s tax policies to go home.

Please join The Middle East Council of American Chambers of Commerce (MECACC), other American Chambers of Commerce (AmChams), and other associations representing overseas Americans in our fight for corrective action. For a strong economy we need a strong global economic foothold around the world.


Typhoonpilot
 

LOGS

Well-Known Member
I need to figure this out too but again, what the government doesn't know they can't tax. There's always ways around this like everything else. I do though need to figure this out like I said before but it is kinda hard when you're in a different country at the time.

=Jason-
 

typhoonpilot

Well-Known Member
I need to figure this out too but again, what the government doesn't know they can't tax. There's always ways around this like everything else. I do though need to figure this out like I said before but it is kinda hard when you're in a different country at the time.

=Jason-

When you sign the 1040 form with incorrect information you've commited perjury which is a federal offense punishable by jail time. Take the foreign earned income exclusion and be happy that you have that. Don't get greedy or you could end up in serious trouble down the road.

Work towards a legal remedy to increase the foreign earned income exclusion. Better yet, work to make the USA like many other countries who do not tax their expatriate citizens. Write to Washington and join an American Business Council where you are living to help in that fight.



Typhoonpilot
 

fsiflyer

Well-Known Member
When you sign the 1040 form with incorrect information you've commited perjury which is a federal offense punishable by jail time. Take the foreign earned income exclusion and be happy that you have that. Don't get greedy or you could end up in serious trouble down the road.

Work towards a legal remedy to increase the foreign earned income exclusion. Better yet, work to make the USA like many other countries who do not tax their expatriate citizens. Write to Washington and join an American Business Council where you are living to help in that fight.



Typhoonpilot
^ Yeah, what he said!
 

LOGS

Well-Known Member
When you sign the 1040 form with incorrect information you've commited perjury which is a federal offense punishable by jail time. Take the foreign earned income exclusion and be happy that you have that. Don't get greedy or you could end up in serious trouble down the road.

Work towards a legal remedy to increase the foreign earned income exclusion. Better yet, work to make the USA like many other countries who do not tax their expatriate citizens. Write to Washington and join an American Business Council where you are living to help in that fight.



Typhoonpilot
How would I join the American Business Council and whatnot. Also I'm finding it difficult to find out about what I should do with taxes since I'm here in India. Like since I came over here in Oct, do I have to pay for 2008 since it wasn't 330 days yet or what? I'm not expecting any change though, I lost all hope of the ability of people to change the way the government is with their money.

=Jason-
 

bafanguy

Well-Known Member
When you sign the 1040 form with incorrect information you've commited perjury which is a federal offense punishable by jail time.
What the heck, what are your chances of getting audited ? And...you can always post on JC...from the prison library. Networking...it's what it's all about !!:laff::laff::laff:
 

PWMURPHY

Well-Known Member
My accountant had me file an extension on the filing until a full year had expired since my arrival overseas.
My original suggestion still holds. Find an accountant in the USA familiar with overseas income.
If you want a name, PM me and I will send you info on my accountant in Florida.
Disclaimer: this is not tax advice and should only be used for entertainment purposes!
PM
 

typhoonpilot

Well-Known Member
How would I join the American Business Council and whatnot. Also I'm finding it difficult to find out about what I should do with taxes since I'm here in India. Like since I came over here in Oct, do I have to pay for 2008 since it wasn't 330 days yet or what? I'm not expecting any change though, I lost all hope of the ability of people to change the way the government is with their money.

=Jason-


http://www.amchamindia.com/


Typhoonpilot
 
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