Expat Taxes- Page Two - Offshore Tax Information - Foreign Earned Income - Paying Taxes Overseas -

Just when it seemed Uncle Sam had forgotten those Americans living abroad, the IRS and Congress have again changed the expat tax laws involving Americans living and working abroad. The new tax provisions took effect for the 2006 tax year and did benefit many expatriates and hurt others. For many years the foreign earned income exclusion has been set at a maximum of $80,000 of earned income for those working and living abroad. That exclusion was increased to $82,400 for 2006, and $85,700 in 2007. To qualify for that exclusion you must live and work abroad for a full calendar year or work abroad for a 12 month fiscal year period and not return to the US more than 35 days during that 12 month period. This change was obviously good for everyone. For partial tax years the exclusion is pro-rated. The not so good part of the change involves the tax that will now be imposed on the income (foreign or from the US) that you make in excess of the foreign earned income exclusion. Under the old law, all taxable income in excess of the exclusion on your expat tax return began to be taxed in the lowest brackets (as if you had no previous income) and then the rate increased as the amount in excess of the exclusion increased.

How to Own Land Anonymously Through the Little Known “Land Trust” - Five Legal Ways You Can Save Taxes Offshore - No adverse tax consequences. There are no tax consequences of transferring property into a revocable trust such as the Illinois land trust. Since you as the grantor maintain control over the property in trust, you are considered the owner for tax purposes. Asset protection — to a point. Real estate in a trust is protected from judgments and liens against the beneficiary. If a judgment is entered against you, the lien will not automatically attach to the property, since the title is not in your name. If the trustee resides in a different state than the property is located, it will be difficult and expensive for creditors to discover your interest in the property. From the best if the Sovereign Society Newsletter. Article By Mark Nestmann

Zero Taxes for Expats - A New Concept In Offshore - The Foreign Earned Income Exclusion Coupled With Offshore eCommerce - In this issue of the Offshore Real Estate Quarterly we have two articles that refer to running a 'service based' business abroad. In those articles we discuss operating an Offshore Serviced Office & Call Center. In one of those articles we mention the Foreign Earned Income Exclusion for US citizens earning income abroad. This Exclusion, allows any expatriate American to earn $80,000 tax free. The $80,000 exemption for foreign income is of interest to the expat who does not want to sever ties with the US. According to the IRS, your tax home is specified by where you work and not by where you live. If we lived in Mexico and drove across the border each day to a job in the United States than we would not qualify for the $80,000 exclusion.

Offshore Web Hosting An Introduction - What it is, how to use, why you want to- What If Bill Could Move His Business To Panama Without Moving From His Easy chair? Bill makes his money from his website, and his website is hosted at a local Denver, Colorado ISP. Bill uses a downtown Denver bank for merchant services, so that he can bill his customers over the internet. The government of the country in which Bill lives, (USA) has absolute access to Bill's ISP, and to Bill's bank account. Bill lives in a country that does not respect privacy. If Bill had his website in Panama, and if Bill used a Private Panamanian or Caribbean Bank Account for his banking and merchant services, then no government agency could enter Bill's ISP, nor Bill's bank. In Panama the law protects banking privacy with banking secrecy laws, and the law protects websites with internet privacy laws.

Expat Exclusion Eliminated - Expats Must Pay U.S. And Foreign Taxes- On May 8, 2003, the Senate Finance Committee (“the Committee”) by a vote of 12-9 passed the modification, put forth by the Chairman, Chuck Grassley (R-IA), to the Jobs and Growth Tax Act of 2003 (“the Bill”), containing many of the tax cuts advanced by the Administration, but with a much smaller dividend exclusion than the total exclusion advocated by the President. The full House of Representatives passed its own version of the bill on May 9. In the revenue offsetting section of the Bill, the Senate is proposing a repeal of foreign earned income exclusion and housing allowance for tax years after 2004. Sec. 350 of the Bill and sec. 911 of the Internal Revenue Code (“IRC”). The Committee believes that the exclusion under IRC Sec. 911 may result in an unfair advantage for individuals who have moved to lower-tax foreign countries, in that such individuals are taxed at a lower global effective rate than similarly situated individuals living and working in the United States.

Want to Really "Escape"? Start Your Own Tax Free Small Business - There are a number of you out there that are "fed up", and you are not alone. Perhaps you are tired of paying more and more each year in taxes, and getting no real value or benefit in return. Perhaps you just want to get out of the "rat race". Maybe you just want to get ahead financially, live the kind of life you thought you would have, and realize where you are now or what you are doing now is not getting you where you need to go. Well, here are some thoughts or ideas to consider. This is not a "get rich quick scheme" but it is about an idea that is proven based on some of our client's own success stories(we have one client that grosses over US$ 100,000 per month-and that's no lie). It is a business idea that requires quite a bit of work and effort on your part, but relatively little capital or start up costs. It is the only business that offers real "freedom".

Foreign Assignment: What About Taxes? - Taxes On Overseas Jobs - In most countries, if you spend more than six months working for the local country, you will be subject to local country taxation. However, as a US citizen or a US resident alien, you are also subject to US income taxation on your worldwide income. The result is dual taxation or being taxed by both countries. Fortunately, the US government allows foreign tax credit on local country income taxes that you have paid. Let’s say that you have earned $150,000 in the local country. For simplicity, let’s assume that there is no foreign earned income exclusion on the $150,000. You have paid $50,000 in local country income taxes. Since you also must file and pay US income taxes, the same $150,000 would also be taxed in the US. By taking the benefits of foreign tax credit, you may offset or reduce your US income taxes by $50,000 of local country taxes.

Mountain-Ringed (Tax-Free) Andorra In The Heart Of The Pyrenees- While our house was being completed, we never felt comfortable about being away for more than 24 hours. When we were finally free, we were like kids in a candy store. Barcelona and the Costa Brava were only three hours away, Madrid and Toledo a half-day. We drove to Pamplona and ran with the bulls for two days, moved on to the emerald-green Basque country and the elegant, Atlantic resort of San Sebastian. On other trips, we headed south to Alicante, Almeria, Marbella, and the Costa del Sol. In time, we scouted most of the peninsula. On the French side, it was only 80 miles to the medieval walled city of Carcassone, the Corbierès vineyards, and the Mediterranean coast. Bordeaux and the Dordogne were a half-day away, Paris and the Brittany coast, a full day. We staggered away from the tables at some of the country’s finest restaurants, but also ate and drank at countless unheralded auberges where the food was also worth a star or two.

The Weather Forecast Is Alarming For - Canadian Permanent Residents Living Or Working Abroad - When you are watching the weather report on television, and specifically the satellite images of earth, you will often see the weatherman identify two or more distinct weather fronts that are forecast to merge into one big storm. Well, if you are a Permanent Resident of Canada and currently (or since you landed) you and/or your family have lived and /or worked in the United Arab Emirates or Kuwait, there are two legal fronts that are highly visible on the satellite screen. They are about to merge into what may become a huge storm that could break directly over your head. Hopefully, you have already taken all the necessary steps to ensure that you are properly protected from the heavy winds and rains that will surely fall upon you and your family when these two fronts come together. Failure to do so could wash away your family’s plans and dreams.

US Tax Information Exchange Agreement with Antigua and Barbuda- On December 6, 2001, the governments of the United States and Antigua and Barbuda signed an agreement for the exchange of information with respect to taxes. Specifically, the object and scope of the agreement targets each country's assistance to assure the accurate assessment and collection of taxes, to prevent fiscal fraud and evasion, and to develop improved information sources for tax matters. At hand for the signing were Treasury Secretary Paul O'Neill and Antiguan Prime Minister and Minister of Finance Lester Bird. In a Treasury News press release announcing the signing, Treasury Secretary Paul O'Neill made the following remarks at the signing:

Tax Saving Tips for Expats - This time of year, whether you want to or not, you must eventually think of doing your taxes. Some people will prepare their own returns, others will hire a professional. Either way, if you want to get the best tax answer you need to be informed and organized. Many people fall into tax traps or ignore potential deductions simply because they did not know any better. The goal of this article is to inform you, organize you, and best of all, save you money! Many people do not realize that US Citizens and Green Card Holders working overseas are required to file a US Tax Return even though they may be considered a tax resident of another country. Additionally, they may have come from a state that still considers them to be resident even while on assignment abroad! Breaking Residency is rather involved and will be discussed separately.

The Kinder and Gentler IRS (You can now make a deal with Uncle Sam)- The IRS has for years had an "Offer in Compromise" program that allows taxpayers to wipe out for pennies on the dollar past due income taxes, and start again with a clean slate. In January of this year, the IRS revised its program, introduced new forms, and liberalized the rules to make it easier to make a deal to eliminate all past years of accumulated U.S. taxes. You can make a deal to pay off your taxes (including the penalties and interest) for only a small percentage of the amount owed. You must make full disclosure of all your income and assets and you also have to propose to the IRS the payment of a lump sum or making payments over a period of years. The offers that the IRS will accept usually allow you to keep enough of your earnings to pay your living expenses and use most your current assets to pay the balance.

Expat Tax - U.S. Taxation of American's Living Abroad- The IRS Presence Overseas. The U.S. has tax treaties with many countries in the world which allow them to exchange data on their citizens living in the other country for tax purposes. The U.S. also has a few agents located in each country that are there to help U.S. expatriates with their tax questions and problems, but are suspected to also report on activities of U.S. expatriates which might not be included in their U.S. tax returns. The IRS has paid bribes, and made other deals with foreign bankers and investment advisors to secure lists of U.S. people who have offshore accounts, and businesses in order to determine if those individuals are reporting their activities on their tax returns. The IRS will not release their statistics on the number of individuals living overseas who do file tax returns, but it is believed that a large number do not. If you do not file a tax return for a tax year, the statute of limitations on that year never runs out.

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