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If your not attached to the USA you can just move you and your business to a territorial based corporate income tax country (singapore, etc). Income not repatr

by mahyarm 15y ago

If your not attached to the USA you can just move you and your business to a territorial based corporate income tax country (singapore, etc). Income not repatriated into the country and not generated from the country is tax free. If your an american citizen you'll still have to pay personal federal income tax to the USA, even if you don't live in the USA, and to your country of residence but you can work with that much better with the ~$100k not living in the USA tax deduction that the US gives you.

camz 15y ago
That's a good point. If you're lover of travel or foreign countries, then there are a number of different countries or economic zones that are similar tax havens. Singapore, Hong Kong and etc are tax havens that don't take foreign sourced income. You only pay tax on income earned from the country. Also, singapore and hong kong have much lower tax rates. You'd be able to take a tax credit on foreign taxes paid in the US 1040 individual tax (this calculation is a little awkward though) or you could choose to exclude 90k+ of income entirely from you 1040 but you'd lose the foreign tax credit. You need make the calculation to see which is the better tax savings. Obviously, if you're earning less than 90k then you should use that. But, to get the 90k exclusion you must remain without the US territories for the majority of the year.
ced 15y ago
the ~$100k not living in the USA tax deduction that the US gives you Could you provide more details? I tried Googling for it, and I could only find: You can also claim an additional exclusion from your U.S. taxes in excess of the $91,500, if the rent, utilities, etc. you pay on your residence abroad and other living expenses exceed a standard amount (which is currently approx $13,300 per year) established by the IRS. This exclusion only comes into play when your earnings are in excess of the $91,500 foreign income exclusion. Is this it?
- camz 15y ago
  Yes that was what we were discussing.
mahyarm 15y ago
I also want to note that the USA is the only country in the world to base income taxation on citizenship/green card and residency, vs residency only for the rest of the world. Be a citizen of anywhere else and you can be really tax free/low tax.
- travisp 15y ago
  Not only does the US tax its citizens who live and work abroad, it will also do so for 10 years after one renounces citizenship.
  - Jach 15y ago
    How do they enforce that one, or even get a hold of your income to know how much they're missing out? Or is it just a general "set foot on this country again and it's prison time for you"?
    - mahyarm 15y ago
      You have to submit accurate tax returns with possible audits resulting extraditions and criminal charges if you don't. And there is FBAR.

by mahyarm 15y ago

camz 15y ago

That's a good point. If you're lover of travel or foreign countries, then there are a number of different countries or economic zones that are similar tax havens. Singapore, Hong Kong and etc are tax havens that don't take foreign sourced income. You only pay tax on income earned from the country. Also, singapore and hong kong have much lower tax rates. You'd be able to take a tax credit on foreign taxes paid in the US 1040 individual tax (this calculation is a little awkward though) or you could choose to exclude 90k+ of income entirely from you 1040 but you'd lose the foreign tax credit. You need make the calculation to see which is the better tax savings. Obviously, if you're earning less than 90k then you should use that. But, to get the 90k exclusion you must remain without the US territories for the majority of the year.

ced 15y ago

the ~$100k not living in the USA tax deduction that the US gives you Could you provide more details? I tried Googling for it, and I could only find: You can also claim an additional exclusion from your U.S. taxes in excess of the $91,500, if the rent, utilities, etc. you pay on your residence abroad and other living expenses exceed a standard amount (which is currently approx $13,300 per year) established by the IRS. This exclusion only comes into play when your earnings are in excess of the $91,500 foreign income exclusion. Is this it?

camz 15y ago
Yes that was what we were discussing.

mahyarm 15y ago

I also want to note that the USA is the only country in the world to base income taxation on citizenship/green card and residency, vs residency only for the rest of the world. Be a citizen of anywhere else and you can be really tax free/low tax.

travisp 15y ago
Not only does the US tax its citizens who live and work abroad, it will also do so for 10 years after one renounces citizenship.
- Jach 15y ago
  How do they enforce that one, or even get a hold of your income to know how much they're missing out? Or is it just a general "set foot on this country again and it's prison time for you"?
  - mahyarm 15y ago
    You have to submit accurate tax returns with possible audits resulting extraditions and criminal charges if you don't. And there is FBAR.