or U.S. Persons with investments and income outside the U.S., the U.S. taxation can be unfavorable and there are enhanced informational reporting obligations. For example, a non-U.S. pension that is taxed deferred in the country where the U.S. Person is a resident may or may not be taxed currently in the U.S. and the U.S. tax treatment will be based on U.S. pension rules. Also, the non-U.S. pension plan will likely be considered a foreign trust which could require additional informational reporting. […]
Tag: tax for U.S. citizens and U.S. tax residents
Learn about tax obligations for U.S. citizens and tax residents, including the requirement to report worldwide income. Our trusted professionals provide guidance on compliance, foreign income reporting, and maximizing tax benefits while avoiding penalties.
U.S. Taxation of U.S. Citizens and U.S. Tax Residents Residing Overseas – Foreign Bank Accounts
The government does not annually tax wealth. However, the IRS wants to know about funds U.S. Persons have in foreign bank accounts. There are now two different reporting requirements for foreign bank accounts, the Foreign Bank Account Report (“FBAR”) and the individual reporting requirement under the Foreign Account Tax Compliance Act (“FATCA”). […]
U.S. Taxation of U.S. Citizens and U.S. Tax Residents Residing Overseas – Mitigation of Double Taxation
There are two methods that a U.S. Person living abroad can use to reduce their U.S. tax liability. The two methods are the Foreign Earned Income Exclusion (“FEIE”) and the Foreign Tax Credit (“FTC”). Even if one of these methods were to eliminate the U.S. Person’s U.S. tax liability, the U.S. Person is still required to file their U.S. tax return if their income exceeds the filing thresholds for the tax year. […]
U.S. Taxation of U.S. Citizens and U.S. Tax Residents Residing Overseas
U.S. citizens and U.S. tax residents (“U.S. Persons”) are taxed in the United States on their worldwide income no matter where in the world they reside. The U.S. taxes based on citizenship, which is different than almost all other countries in the world that tax based on residence.
This often catches U.S. Persons who have never lived in the U.S. or have lived abroad for a number years by surprise. Any U.S. Person living abroad with income for tax year 2023 above the following thresholds must file a U.S. tax return: […]
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