The United States is just one of two countries, the other being Eritrea, to have a citizenship-based taxation system. All the other nations have a residency-based taxation system and generally tax the worldwide income earned by their residents and the income from domestic assets owned by both residents and nonresidents. The US, instead, taxes their citizens and green card holders on their worldwide income no matter where they live, and also imposes onerous information filing requirements on most of the assets that they own overseas, including the reporting forms required by FBAR (Foreign Bank Account Reporting) and FATCA (Foreign Account Tax Compliance Act). Given that foreign resident US citizens are also subject to tax in their resident country, this results in complex double reporting and in certain instances, can result in double taxation.
These are some of the most common questions we help US expats with:
– What are my US tax obligations when living abroad? When am I required to file a tax return (federal and state) or report an offshore account, investment or other asset?
– Am I eligible for any tax treaty benefits? What do I need to know about income tax treaties, social security (totalization agreements) treaties and gift and estate tax treaties?
– What is tax equalization and how can I make sense of my expat employer benefits?
– Is there anything I should be doing to be more tax efficient?
– I am not complying with my US tax obligations. Are there any IRS programs available to help me become compliant? Do I qualify and what do I need to do?
– I received a letter from the IRS. What does it mean and what should I do?
– I want to start a business abroad, what do I need to know?
– Do I have to report and pay US taxes on my foreign pension?
– How do I save for retirement tax efficiently while working abroad?
– Should I give up my greencard or US citizenship? What are the considerations and the process?
– I want to buy a home abroad, are there any US tax implications?
– I was laid off from my foreign job. Is my severance payment taxable?
– Should I sell my US home or rental properties when I move abroad?
– Should I keep my US credit card/bank account/investment account?