Post: #26

(09-02-2011 05:23 PM)worldwidetraveler Wrote:  I guess firstly, what is significant income? C Corps are not too expensive to maintain. Maybe you are talking about California fees which isn't the same as the rest of the US.
I don't know where you got that. You have more stuff to comply with an you should be doing similar stuff with your llc to make it look legit.

CA basic fees are the same for C/S corp and LLC. It was around $800 a year last time I checked. However AFAIK if you're corp, there are extra requirements, i.e. board meetings, protocols, more paperwork with your tax return etc. This article highlights some issues; it compares against sole proprietorships, but most single-person LLCs are the same.

Quote:Second, distributions from a SCorp or LLC are not taxed the same as income. Social Security and Medicare are only paid on SALARIES. Thus, you are not paying those if you don't take a salary.

Yes. However there is a fine line. If your corp makes around the amount of salary you're paying yourself, there are no savings. If your corp makes much more over 100k, then savings are low because social security taxes stop around 100k, and the rest is Medicate only at 2.9% (plus income, of course).

Ultimately it all depends on how much money your business makes versus your expenses. There is no single perfect structure.

Post: #27

(09-02-2011 08:11 PM)The Duke Wrote:  

(09-02-2011 06:22 PM)cool Wrote:  I actually used this when I taught English in S. Korea. I was in Korea for all of 2006.

All the money I made there was exempt from US taxation.

Did you have an accountant help you, or did you brave form 2555 yourself?

Did you pay any income taxes in Korea?

My dad helped me. We use Turbo Tax to do our taxes.

It's simple. I kept all my pay statements from the school.

Yes, I paid income tax in Korea, but it's a very low rate. Under 10 percent, I believe.

Post: #28

I qualified this year and it saved me a ton of money. It looks like I will be staying out of the USA 11 months of every year now.

Post: #29

(02-28-2012 03:34 PM)Roosh Wrote:  I qualified this year and it saved me a ton of money. It looks like I will be staying out of the USA 11 months of every year now.

Smooth.

Can you break this down a little?

Was it an issue that you make your income in America?

Post: #30

(08-31-2011 06:55 PM)oldnemesis Wrote:  

(08-30-2011 06:37 PM)worldwidetraveler Wrote:  We are talking about person income, not what your business is making.

Did you actually read the Publication 54?
It makes it very clear that only earned income could be excluded.
For example, your gambling winnings, alimony and pension are definitely personal income, but it CANNOT be excluded.
Your professional fees may be business income which CAN be excluded.
Business income is stated as "variable", meaning it may or may not be excluded depending on circumstances.

Glad you mentioned Publication 54. I was going to bring that up. My boy from the States has been living in Thailand and Brazil for the past 7 years, but he was paying US taxes on "earned" income while not being cognizant of the exception. The good thing is the IRS refunded him "retroactively" for years of mistakenly taxed income, thanks to an astute tax accountant he spoke with. He was happy as hell to get a check for ten grand!

Post: #31

(02-28-2012 04:47 PM)thegmanifesto Wrote:  

(02-28-2012 03:34 PM)Roosh Wrote:  I qualified this year and it saved me a ton of money. It looks like I will be staying out of the USA 11 months of every year now.

Smooth.

Can you break this down a little?

Was it an issue that you make your income in America?

My accountant still has to send me the final returns, but if your income is a result from your foreign activities (i.e. you are working while abroad) AND you live abroad 11 out of 12 months, you should be okay. But if you have a laundromat in the US but live abroad all year, you might not be able to pull the deduction off.

Post: #32

Uncle Sam is taking $5-6K per month from my check. This is why I am "banished" from the states till Oct. If not, I won't see most of that money returned.

A word of advice. ALWAYS pay into the tax system, then get the big return after filing the following year. I know a lot of guys that filed tax exempt, then had to go back to the states for family emergencies, injuries, losing their job, ect. Come tax time they owed around $20-30K to the "Guv". That's hard to pay back when you aren't working, and spent all your savings on toys, mortgage, ect.

I doesn't bother me now, since the interests rates are so low with the banks. The money I give them up front isn't making me money anyway. Besides, I look at it an emergency savings plan. Next year I know I'll get a fat return, and it's money I can't touch till then. I file single and 0 so the max can be taken out. If my master plan fails later, and I'm broke and jobless in Sao Paulo, there will be money to use later to get back on my feet.

Post: #33

(02-28-2012 05:36 PM)Roosh Wrote:  

(02-28-2012 04:47 PM)thegmanifesto Wrote:  

(02-28-2012 03:34 PM)Roosh Wrote:  I qualified this year and it saved me a ton of money. It looks like I will be staying out of the USA 11 months of every year now.

Smooth.

Can you break this down a little?

Was it an issue that you make your income in America?

My accountant still has to send me the final returns, but if your income is a result from your foreign activities (i.e. you are working while abroad) AND you live abroad 11 out of 12 months, you should be okay. But if you have a laundromat in the US but live abroad all year, you might not be able to pull the deduction off.

I believe this is accurate, I got an accountant and filed the extension last March, accountant fee $300 bucks, saved me thousands of dollars in taxes and spent 3 months doing nothing in Colombia to meet the 330 day requirement (only needed 1 more month to qualify).

Tax refund paid for my entire trip, not a bad gig if you can pull it off.

Post: #34

Oh and if you're self-employed you still have to pay social security.

Post: #35

(02-29-2012 12:28 PM)Roosh Wrote:  Oh and if you're self-employed you still have to pay social security.

I guess medicare too? Still the double self employed rate?

Post: #36

Correct. I think it's 15%.

Post: #37

(02-28-2012 05:36 PM)Roosh Wrote:  My accountant still has to send me the final returns, but if your income is a result from your foreign activities (i.e. you are working while abroad) AND you live abroad 11 out of 12 months, you should be okay.

330 full days during the tax year, to be specific. Not just living abroad 11 months out of 12 unless you have a different tax year (is it available for individuals?)
Make sure you can prove it in case you're audited, and that you can still prove it even if you lose your passport tomorrow. The burden is on you.

Quote:But if you have a laundromat in the US but live abroad all year, you might not be able to pull the deduction off.

Yes. Only the earned income is excluded. Business profit is not automatic earned income, and the only part which is deducted is when your "personal services are an important part of producing the income".

Post: #38

FYI for Americans. If you qualify for Foreign Income Exclusion, the medical insurance mandate starting in 2014 does not apply to you.

Quote:1) Eligible for the IRS’s foreign earned income exclusion, which means the expatriate must have a tax home (the general area of your main place of business or employment where you happen to be permanently or indefinitely engaged) in a foreign country, as well as be either a legitimate resident in that country, or

2) spend at least 330 days a year outside the United States.

http://whiskeyandgunpowder.com/expat-meet-obamacare/

Post: #39

(05-15-2013 01:43 PM)The Duke Wrote:  FYI for Americans. If you qualify for Foreign Income Exclusion, the medical insurance mandate starting in 2014 does not apply to you.

Quote:1) Eligible for the IRS’s foreign earned income exclusion, which means the expatriate must have a tax home (the general area of your main place of business or employment where you happen to be permanently or indefinitely engaged) in a foreign country, as well as be either a legitimate resident in that country, or

2) spend at least 330 days a year outside the United States.

http://whiskeyandgunpowder.com/expat-meet-obamacare/

well golly gee isn't it nice of the US government to exempt expats from paying for healthcare they never would use.

The US just blows - I hate the fact that we're basically the only Western country that taxes it's citizens abroad. All my UK, European and Aussie friends laugh at me when they realize I have to pay taxes above a certain income. It's just so unfair and ridiculous really. Makes me not want to give any children I have, if any, a US passport....its almost become a liability for me and others now, as opposed the golden ticket it supposedly was years ago.

Post: #40

i've done some snooping on the Interwebs, found this page, is it any good ???

http://www.theparisblog.com/top-7-tax-ti...taxpayers/

Post: #41

(03-01-2012 11:09 PM)oldnemesis Wrote:  330 full days during the tax year, to be specific. Not just living abroad 11 months out of 12 unless you have a different tax year (is it available for individuals?)
Make sure you can prove it in case you're audited, and that you can still prove it even if you lose your passport tomorrow. The burden is on you.

I have done this several times working in SW Asia as a contractor.

Income earned during any year in which you spend 330 days out can be excluded. It does not have to be the calendar tax year, and you can "roll" the dates and overlap them.

Basically, if you were out of the USA from June to June or March to March you can still exclude income earned within that period.

Another tip: if you are leaving the USA by air and fly over a foreign country before midnight after leaving US airspace, you can count the next day as being outside the USA.

Example: JFK - FRA flight leaving at 8pm flies over Nova Scotia before midnight.

On the other hand, if you flew from MIA - FRA and did not fly over Canada or, say Bermuda on the way out before midnight, the next day would be counted against you.

Post: #42

What is to stop you guys from simply not reporting your income earned overseas if you do not in fact meet the 330 day minimum? I can understand that for those with mad money repatriating it back to the states will be kinda awkward if you didn't report any earnings, but what about the lowly bottom dwellers who may only make 20-30,000? If you're teaching English in Asia, for example, why not just simply say that you had no steady employment and only made a few hundred bucks a month for living expenses? It's not like foreign entities report your earnings to the IRS, so how would be IRS be able to call you out?

Post: #43

(05-18-2013 10:42 PM)rekruler Wrote:  What is to stop you guys from simply not reporting your income earned overseas if you do not in fact meet the 330 day minimum? I can understand that for those with mad money repatriating it back to the states will be kinda awkward if you didn't report any earnings, but what about the lowly bottom dwellers who may only make 20-30,000? If you're teaching English in Asia, for example, why not just simply say that you had no steady employment and only made a few hundred bucks a month for living expenses? It's not like foreign entities report your earnings to the IRS, so how would be IRS be able to call you out?

One thing that US citizens living abroad should be aware of is new rules regarding reporting of financial accounts of Americans living abroad.

http://www.irs.gov/Businesses/Small-Busi...%28FBAR%29

http://americansabroad.org/issues/fbar/f...-accounts/

When I was living and working in Israel (I'm a US citizen too), my bank contacted me in 2012 and forced me to sign a form giving them permission to report about my account to the US government. If I wouldn't sign, they would have closed the account.

Now this doesn't necessarily mean that you need to pay taxes on income earned abroad, but things are going to be pretty obvious to the IRS when you have a steady income in a foreign account.

I think the idea is to cut down on money laundering and tax evasion of US citizens abroad. Pretty annoying and invasive though.

Post: #44

When I was Working overseas back in 2001 I had to stay outside of us for the 330 days. Alot of co workers didn't bother reporting income. If you work for a non us company without using your ss number there is really no way for them to know. The key is either get paid in cash or open an offshore bank account. Our company had a deal with the royal bank in Scotland in guernsey so employees could open an account.

Post: #45

(05-19-2013 07:21 PM)Sabra Wrote:  

(05-18-2013 10:42 PM)rekruler Wrote:  What is to stop you guys from simply not reporting your income earned overseas if you do not in fact meet the 330 day minimum? I can understand that for those with mad money repatriating it back to the states will be kinda awkward if you didn't report any earnings, but what about the lowly bottom dwellers who may only make 20-30,000? If you're teaching English in Asia, for example, why not just simply say that you had no steady employment and only made a few hundred bucks a month for living expenses? It's not like foreign entities report your earnings to the IRS, so how would be IRS be able to call you out?

One thing that US citizens living abroad should be aware of is new rules regarding reporting of financial accounts of Americans living abroad.

http://www.irs.gov/Businesses/Small-Busi...%28FBAR%29

http://americansabroad.org/issues/fbar/f...-accounts/

When I was living and working in Israel (I'm a US citizen too), my bank contacted me in 2012 and forced me to sign a form giving them permission to report about my account to the US government. If I wouldn't sign, they would have closed the account.

Now this doesn't necessarily mean that you need to pay taxes on income earned abroad, but things are going to be pretty obvious to the IRS when you have a steady income in a foreign account.

I think the idea is to cut down on money laundering and tax evasion of US citizens abroad. Pretty annoying and invasive though.

The US has no reason or rationale to tax it's citizens on income earned in a foreign currency while living abroad. To my knowledge we are the only major country that does this other than Japan (who are notorious in trapping it's citizens to only investing domestically to prop up the bond and other markets - mr. and mrs. watanabe etc.). Nobody else in the Western World does it currently, not even France.

It sucks we have to pay ANY taxes on income earned abroad but we do.....just so unfair.

Post: #46

Interesting article about citizenship and taxes. Gives good theory about how it's smarter to just leave the country and not file a tax return than to renounce and risk being rejected for a visa due to the Reed Amendment:

http://www.johntreed.com/renouncingUScitizenship.html

Of course, renouncing only makes sense if you're a millionare and most of your money is from investments. Get around the CFC and PFIC laws, and there's gotta be a way to defer taxation on investment income.