Actions have tax consequences, and actions taken without consideration to these tax consequences are likely to result in a higher tax and reporting burden than those that were planned taking tax laws into account. The goal of tax planning, whether for the US resident or nonresident, is to arrange one’s financial affairs in a way that minimizes taxes and the administrative burden.
For prospective US immigrants, the best time for tax planning is before they become US residents and subject to US taxation on their worldwide income, in addition to becoming subject to FBAR and FATCA reporting on their foreign financial assets. The same applies to US expat in the opposite direction, with considerations that include analyzing what deductions and exclusions may be available given the characteristics and location of the foreign assignment, the most simple and efficient way to continue to save for retirement and other goals while living abroad, understanding FBAR and FATCA reporting requirements and minimizing the risk of double taxation.
We help foreign investors understand how and when income generated by their investments will be taxed, what elections and treaty benefits are available to them to minimize their tax burden, and discuss estate and gift tax considerations, which vary significantly from those of a US citizen or US domiciled foreign national given the much lower exemption amounts at play.
We have deep expertise in US-Swiss cross-border tax planning in particular, including the US tax treatment of Swiss pensions (Pillars 1, 2 and 3a), Swiss wealth tax, Swiss tax returns review, tax benefits available through US-Swiss tax treaties, the risks and opportunities resulting from the different ways in which the US and Switzerland tax income, and how to help those exposed to both tax systems minimize their overall tax exposure.