Two Mistakes US Taxpayers Make When Moving Offshore
It’s compelling to think about moving your money, your business, your retirement, and even yourself to another country. Whether it’s the beaches and warm sea air or the excitement of discovery of a place that is just different, distant lands hold an allure.
One of those benefits may also be the ability to escape the US tax system. Is it possible? Yes, but maybe not in the way you might think.
Here are two common mistakes US taxpayers make when considering moving their money or themselves offshore.
1. Not Following The Reporting Requirements
It’s not illegal for Americans to hold foreign assets. But it is criminal to not make the required report of those accounts. The US government has been undertaking a global campaign to track down foreign bank and investment accounts used by US taxpayers to evade tax. Since 2009, and as a result of amnesty programs, over 35,000 taxpayers have come forward. But the government feels that is just the tip of the iceberg.
And, as the saying goes, this all just got real. In 2014, the government began new procedures for individuals who have previously not been reporting. And they also began a controversial new US law. It’s the Foreign Account Tax Compliance Act (FATCA) and it’s an all-out search for non-compliant US taxpayers with offshore accounts.
Foreign financial institutions must now annually disclose accounts held by US individuals or be banned from participating in US capital markets. In other words, the US is using a heavy hand to force foreign institutes to report the accounts. And, at the same time, they are allowing US taxpayers to come forward voluntarily. But, the amnesty program won’t last forever.
If you have investments, signing authority over an account, a trust, or a business, check with your CPA. You may have a requirement to report. And if you’ve missed it for a few years, now is the time to come clean.
2. Following Bad Advice Regarding US Tax And Foreign Businesses
Some of the dangerous, and criminal, the information you may have heard include moving your business offshore and then bring the money back into the US, under the radar, with debit cards. This is wrong! And, it’s illegal!
There are legal ways to create foreign income streams that you can keep separate from your US earnings, but you must follow very specific and strict rules to do so. And that includes not bringing the money back to the US. If you bring it back, it’s taxable.
If you’re looking to build assets outside the US or move existing cash and investments offshore, you need to report the accounts and you need to follow the rules regarding US tax. In fact, the best question you can ask isn’t “How do I do it?” In light of the increased US scrutiny and harsh civil and criminal penalties, the most important, and first, the question you should ask is quite likely, “Whose advice can I trust?
Conclusion
Here is probably the most extensive ebook on Everything You Ever Wanted To Know About Eliminating Your Taxes, Protecting Your Assets And Regaining Privacy Over Your Life And Investments. It is called The Ultimate Guide To Going Offshore.
I hope you enjoyed reading this article: Two Mistakes US Taxpayers Make When Moving Offshore. If you have any questions, please contact our office HERE.
I’ve included some great articles for you to read, enjoy!
Can You Move Your Online Business Offshore For Less Taxes?
3 Offshore Resources That Should Be Part Of Your Financial Planning
Escape Artist – What You Need To Know Before Filing Your Taxes
Diane Kennedy, CPA helps business owners legally pay less tax. She’s the New York Times best-selling author of “Loopholes of the Rich”, “Real Estate Loopholes”, and 7 other best-selling financial and tax books. She’s also a business owner and real estate investor. Her motto is “It’s Your Money. Keep More Of It.”
Contact Author
"*" indicates required fields
Stay Ahead on Every Adventure!
Stay updated with the World News on Escape Artist. Get all the travel news, international destinations, expat living, moving abroad, Lifestyle Tips, and digital nomad opportunities. Your next journey starts here—don’t miss a moment! Subscribe Now!
