[The Beast1]

To all of the dudes that live in foreign countries, do you guys report to the IRS your income?

I'm curious if the laws really apply to just uber rich Americans who shuffle money abroad. But knowing the IRS, they don't care so long as they have someone to stick.

[TheBulldozer]

A VERY general rule...

Income under 95K is untaxed living abroad.

[Flavius Aetius]

It is one of those tricky questions. Does the US government tax you on all worldwide income? Yes (we live in a police state).

However, unless the company or employer you work for abroad sends a form to the IRS--they don't know about it. If you earn money, but it is not reported to the IRS, did you really earn money and have to pay tax on it?

Depends on whether you are a good little tax slave or not.

The only person I know who lives/works abroad (in the middle east) does not report income to the IRS. Who the hell would voluntarily report income to the IRS?

[birdrussell]

I'm getting butt fucked here kindda. The lion share of my income comes in the form of my military pay check. If I had another hustle going on though best belive I wouldn't say a word. Income tax is so much bull shit any way. Our country was base on the principle that a limited govenmet didn't have the right to take ones hard earned money. If I was earning extra income on the side I would see it as my patiotic duty to leave it unreported. All the government is going to do with my money anyway is give some slut her 3rd abortion and feed a bunch of babies that I have become responcible for because the piece of shit parents had a bunch of kids they weren't able to support financially.

[The Beast1]

(12-16-2013 04:32 PM)Flavius Aetius Wrote:  

It is one of those tricky questions. Does the US government tax you on all worldwide income? Yes (we live in a police state).

However, unless the company or employer you work for abroad sends a form to the IRS--they don't know about it. If you earn money, but it is not reported to the IRS, did you really earn money and have to pay tax on it?

Depends on whether you are a good little tax slave or not.

The only person I know who lives/works abroad (in the middle east) does not report income to the IRS. Who the hell would voluntarily report income to the IRS?

I did some research on it, but I believe this is the situation on it. I figured it affected banks, but from what I've researched a lot of banks don't report your nationality if you have the right IDs. A few expats in Canada said they supplied their equivalent of a social security card and the banks didn't know whether they were US citizens or not.

Still questionable.

[Flavius Aetius]

(12-16-2013 05:02 PM)frenchie Wrote:  

(12-16-2013 04:32 PM)Flavius Aetius Wrote:  

It is one of those tricky questions. Does the US government tax you on all worldwide income? Yes (we live in a police state).

However, unless the company or employer you work for abroad sends a form to the IRS--they don't know about it. If you earn money, but it is not reported to the IRS, did you really earn money and have to pay tax on it?

Depends on whether you are a good little tax slave or not.

The only person I know who lives/works abroad (in the middle east) does not report income to the IRS. Who the hell would voluntarily report income to the IRS?

I did some research on it, but I believe this is the situation on it. I figured it affected banks, but from what I've researched a lot of banks don't report your nationality if you have the right IDs. A few expats in Canada said they supplied their equivalent of a social security card and the banks didn't know whether they were US citizens or not.

Still questionable.

One thing I have learned from previous dealings with the IRS is that they will be happy to send you a copy of all the income reported to them in your file for tax purposes. All W-2, 1099s, interest income from oversea banks etc. This makes it pretty simple. If the IRS has a record of it, you have to put in on your tax return.

They harassed me one year because I failed to include $160 in dividend income on my tax return. The amount was so trivial I ignored it, but the IRS computers saw that I had not declared the income from the 1099 form they had in my file for the tax year.

[Dr.Benway]

...

[paninaro]

This isn't really that complicated. The US has tax treaties with just about every country, to prevent double taxation.

So if you follow all the rules and report taxes to the US and your country of residence, then your total tax burden is the higher of the US tax rate vs resident country's tax rate. Typically (esp compared to Europe), the US tax rate is lower, especially since an American living abroad does not need to pay state or city income tax in the US.

The income exemption for around $95k of earned (not passive) income also applies, but even if it didn't, you'd still have the double tax protection from the tax treaty.

I'd say just report it. There is already information-sharing between countries with bank account information (balances) of foreign citizens, so the IRS probably knows about it anyway, and in some cases it's a crime not to report it. Why not just report it, especially since you may not owe any additional taxes anyway (due to tax treaty)?

[shanked]

Don't report cash jobs and try to report below tax threshold so you don't pay tax or at least very little tax. Not reporting at all will obviously arise suspicion its illegal and will show up to them after a couple years of no reports.

[Dr. Howard]

1.

Quote:

However, unless the company or employer you work for abroad sends a form to the IRS--they don't know about it. If you earn money, but it is not reported to the IRS, did you really earn money and have to pay tax on it?

Bad idea. They do know, its called FATCA and is an act where foreign bank are essentially bullied into reporting US citizen banks accounts abroad to the US.

Also, with a request from the IRS software exists that skims your bank transactions and puts them into rough IRS tax categories to build an income profile

2.

Quote:

A VERY general rule...

Income under 95K is untaxed living abroad.

Yes, untaxed but it has to be reported and then the exemption used. There are also some nuances that need to be followed to make sure that you qualify for the exemption. The most important is that your tax home isn't in the US and that your time spent in the US in the tax year has only been a few days.

Its your choice if you want to roll the dice on your US related taxes abroad but the main thrust but essentially the more years you fuck around or don't report the more you should be planning your retirement abroad as well.

There is no statute of limitation on the IRS coming after you for unfiled returns and their flags will start to go off if you come back to the US and start to establish a pattern of income again the blank years will stick out like a sore thumb.

[Enigma]

(12-16-2013 04:10 PM)MaleDefined Wrote:  

A VERY general rule...

Income under 95K is untaxed living abroad.

Damn, I did not know this. Nice.

[portofmanteau]

The 95k exemption is assuming you're outside of the US for at least 330 days a year. That's for FIT and many states give you a SIT exemption. You still have to file obviously, and you still pay social security medicare etc.

[paninaro]

(12-17-2013 04:08 PM)portofmanteau Wrote:  

The 95k exemption is assuming you're outside of the US for at least 330 days a year. That's for FIT and many states give you a SIT exemption. You still have to file obviously, and you still pay social security medicare etc.

Minor correction here. If you live outside of the US 330 days a year (which is known as having a tax home outside the US by "physical presence test" as the IRS calls it), then there is no state income tax from a US state since your tax home is outside the US.

As for social security, the US does have agreements in place with 24 countries to prevent double payments there (reciprocity, basically). A few of those countries are popular destinations for RVF members:
http://www.ssa.gov/international/agreeme...tions.html

[gfly]

I don't know shit about this personally but there was an article recently about a huge spike in longterm expats giving up their us citizenship because the expat tax laws just got complicated and expensive.

[Duke Castile]

Sorry for being off topic but does anyone have info about what amounts of cash can be deposited and moved without setting off any red flags with irs?

I was told it's under 10k but then later heard it's 5k a week.

[JohnQPublic]

US citizens are required to file and report world wide income. But normally if you pay taxes in one country, you won't be double taxed on it by the US. If you set yourself up as a freelancer, live in the US and get paid in the US, you get $95k tax free, but you have to pay a self-employment tax of 15% (for social security). If you live in a country, declare a little income there, but most in the US and pay foreign country social charges on the little foreign country income, then you are exempt from the U.S. self-employment tax if you file the right form.

US citizens are also required to report all money held in foreign bank accounts when the total amount in all banks combined is greater than $10k. Somebody recently told me that starting in 2014 all banks worldwide will report deposit amounts held by American citizens to the IRS even if the balance in the account is very small. This is "to prevent money laundering". LOL

[renotime]

(12-18-2013 12:30 AM)Fisto Wrote:  

Sorry for being off topic but does anyone have info about what amounts of cash can be deposited and moved without setting off any red flags with irs?

I was told it's under 10k but then later heard it's 5k a week.

Just use a safety deposit box if you are that worried about it.

[DVY]

Fisto- 3k is a safe amount. Anything above 4-5k and the risk of a SARS report- suspicious activities report- goes up.

[polar]

My understanding is that $3k and above, they're required to report it.

Even with smaller amounts, it is up to the bank - the employees are brainwashed trained to report suspicious transaction patterns to compliance for AML purposes. For instance, splitting large amounts up into smaller ones, going just under threshold amounts, bursts of activity on infrequently used accounts, atypical transaction patterns / flows, dealings with flagged countries and individuals, etc.

Might be best for someone who doesn't want to get flagged to keep cash transactions with banks under $1k, and have more frequent dealings in similar transaction amounts to establish history.


Disclaimer: I am not a tax accountant / lawyer / etc, consult one for details, this post is for informational purposes only, this isn't advice, not to be used for tax evasion, yadda yadda etc

[paninaro]

(12-18-2013 12:30 AM)Fisto Wrote:  

Sorry for being off topic but does anyone have info about what amounts of cash can be deposited and moved without setting off any red flags with irs?

I was told it's under 10k but then later heard it's 5k a week.

http://en.wikipedia.org/wiki/Currency_tr...ion_report

It's $10k but there's nothing to prevent a financial institution from reporting if it's less than that.

[DVY]

10k+ is automatic SARS, but it can be any amount. I think a safe # is 3k.

[worldwidetraveler]

Fisto, I would bet money that not only is there a dollar amount but also a history of transactions that may flag reporting.

For example, sending 5k every other day may trigger an alert.

[Duke Castile]

Thanks guys, I'll keep it around 3k as less than that will be impractical.

[Akula]

(12-19-2013 04:41 PM)Fisto Wrote:  

Thanks guys, I'll keep it around 3k as less than that will be impractical.

Another way to do it is to just take cash out if you want to avoid inter-bank transfers fees & charges. You usually can exchange $$s for other currencies I think at most of the major US bank offices and get a decent rate if you plan ahead.

That's what I do when I come back home from Russia (the other way around). I just exchange some Rubles for Dollars or Euros and carry it with me. And you don't need to report it unless it's over $10,000. I know it could be scary carrying around all that cash, but I split it up, and $3000 fits easily in my wallet. You're not doing anything illegal anyway (but I'm sure the US police state will eventually want to track this someway too by eventually putting some kind of memory chip in each bill!).

I find that I usually get good exchange rates with my debit card anyway so don't really take too much with me now and just use my card for the most part. But that has risks too - my buddy here just had his card 'cloned' somehow and someone was spending thousands on it in Vietnam (!!). He was using it all over Asia in places like Thailand, Indonesia and Malaysia - plus Egypt recently, so not sure where it happened. He's a UK citizen, and apparently there you are covered, but not sure about how it works in the US.

RE the US persons living abroad exemption(s), well, I am pretty attuned to this given that Russia's taxes (13%, flat) are way lower than in the US and I report taxes every year and have to pay over and above Russia's - even though the crappy, out-of tune with the rest of the world US tax system seems to be one of the only ones that taxes it's citizens on global income.

That's another story (and a big joke IMO - the US is the only advanced country in the world that does it ) but basically you get two exemptions: 1) a maximum of $97,600; and 2) a housing allowance (which can be anywhere from $20,000 to over $100,000 depending on where you live. It's big in Moscow due to the hugely expensive cost of housing here). See IRS form 2555 for how this works, and also check out the instructions to form 2555 for more details (but also consult with a tax accountant if you want more detailed information (my little disclaimer))))

[Dr. Howard]

(12-20-2013 01:43 AM)Akula Wrote:  

(12-19-2013 04:41 PM)Fisto Wrote:  

Thanks guys, I'll keep it around 3k as less than that will be impractical.

Another way to do it is to just take cash out if you want to avoid inter-bank transfers fees & charges. You usually can exchange $$s for other currencies I think at most of the major US bank offices and get a decent rate if you plan ahead.

That's what I do when I come back home from Russia (the other way around). I just exchange some Rubles for Dollars or Euros and carry it with me. And you don't need to report it unless it's over $10,000. I know it could be scary carrying around all that cash, but I split it up, and $3000 fits easily in my wallet. You're not doing anything illegal anyway (but I'm sure the US police state will eventually want to track this someway too by eventually putting some kind of memory chip in each bill!).

I find that I usually get good exchange rates with my debit card anyway so don't really take too much with me now and just use my card for the most part. But that has risks too - my buddy here just had his card 'cloned' somehow and someone was spending thousands on it in Vietnam (!!). He was using it all over Asia in places like Thailand, Indonesia and Malaysia - plus Egypt recently, so not sure where it happened. He's a UK citizen, and apparently there you are covered, but not sure about how it works in the US.

RE the US persons living abroad exemption(s), well, I am pretty attuned to this given that Russia's taxes (13%, flat) are way lower than in the US and I report taxes every year and have to pay over and above Russia's - even though the crappy, out-of tune with the rest of the world US tax system seems to be one of the only ones that taxes it's citizens on global income.

That's another story (and a big joke IMO - the US is the only advanced country in the world that does it ) but basically you get two exemptions: 1) a maximum of $97,600; and 2) a housing allowance (which can be anywhere from $20,000 to over $100,000 depending on where you live. It's big in Moscow due to the hugely expensive cost of housing here). See IRS form 2555 for how this works, and also check out the instructions to form 2555 for more details (but also consult with a tax accountant if you want more detailed information (my little disclaimer))))

Canada also taxes on worldwide income.