4 ms·

It was my understanding that it's not true double taxation, but rather the US gets the money difference if it's the higher tax. So for example, if country ABC'

It was my understanding that it's not true double taxation, but rather the US gets the money difference if it's the higher tax. So for example, if country ABC's tax rate is 25% and the US would be 38% for you, you'd pay ABC 25% and the US 13%. If however ABC country was 42% tax rate and the US 33% for you, then you'd owe the US government nothing (but wasted time) on your income. Correct me if I'm wrong, but I am pretty sure this is how it works.

deleted 10y ago
[deleted]
arcticbull 10y ago
That's how it works if the country you're in has a no-double-taxation treaty with the US, and what's included/how it's calculated depends on how the treaty works. Many do not. [1] If you live in a country without a tax treaty, like the Bahamas for instance, you must pay both taxes separately with no offsets/credits. [2] IANATA though so always worth double-checking with this kind of money on the line. My experience with this is moving to the US from Canada, so I dealt with both tax treaty income and dual-status returns. [1] http://www.rumbaklaw.com/resources-and-tools/us-federal-tax-resources/countries-with-and-without-income-tax-treaties-with-the-u-s/ http://www.rumbaklaw.com/resources-and-tools/us-federal-tax-... [2] https://www.irs.gov/individuals/international-taxpayers/tax-treaties https://www.irs.gov/individuals/international-taxpayers/tax-...