Tax consequences of becoming a US citizen
On 9 Jul 2002 at 14:02, Tim May wrote:
Unless one's stay is a short one (see below), income or other money earned while in the U.S. (and maybe earned outside the U.S. if the IRS can make a nexus case) is taxable.
The question really is: Suppose one becomes a US citizen, and then resides outside the US. Then is money on earned on assets outside the US taxable by US authorities. If, on the other hand, after being a resident for a while, and paying taxes on money earned while in the US, one leaves the US and resides somewhere else, retaining some US assets, is the money earned on non US assets taxable? Is income of a non US resident, on non US assets, earning non US income taxable? Would it be taxable if that person had been so careless as to become a US citizen during his stay in the US?
Becoming a U.S. citizen exposes a person to not only the _current year_ tax scheme but also the "for ten years after you leave the U.S." tax scheme. (Yes, any U.S. citizen who moves anywhere in the world must, technically, file U.S. tax returns for 10 years after leaving. And pay various kinds of taxes, though the amount may be different from what he would have paid had he remained in the U.S.)
So do I get eligible for imperial taxes anywhere in the world merely by staying in the US a while, having a green card and paying US taxes, or do I only get eligible for imperial taxes anywhere in the world by taking US citizenship?
On Wed, Jul 10, at 03:30AM, Anonymous wrote: | The question really is: Suppose one becomes a US citizen, and | then resides outside the US. Then is money on earned on assets | outside the US taxable by US authorities. Yes it is. If you are a US citizen your income can be taxed anywhere in the world. However, there is a trick here, there is a certain ammount (I believe it to be around $80k) up to which you're exempt from taxation. | If, on the other hand, after being a resident for a while, and | paying taxes on money earned while in the US, one leaves the US | and resides somewhere else, retaining some US assets, is the money | earned on non US assets taxable? Is income of a non US resident, | on non US assets, earning non US income taxable? Would it be | taxable if that person had been so careless as to become a US | citizen during his stay in the US? As far as I know, all money made in the US (investments or otherwise) are taxable as US income. Where the "owner" of the money resides is irrelevant. | So do I get eligible for imperial taxes anywhere in the world | merely by staying in the US a while, having a green card and | paying US taxes, or do I only get eligible for imperial taxes | anywhere in the world by taking US citizenship? This question has multiple parts. First off, you can't have a green card and not be a US resident. The requirements for both go hand in hand, if you stay out of the US long enough to not be taxed, you're also out of the US long enough to lose your green card. Likewise, if you get US citizenship, you're subject to being taxed anywhere in the world. (see the paragraph above)
On Tuesday, July 9, 2002, at 06:30 PM, Anonymous wrote:
On 9 Jul 2002 at 14:02, Tim May wrote:
Unless one's stay is a short one (see below), income or other money earned while in the U.S. (and maybe earned outside the U.S. if the IRS can make a nexus case) is taxable.
The question really is: Suppose one becomes a US citizen, and then resides outside the US. Then is money on earned on assets outside the US taxable by US authorities.
Yes, but under expat tax rates. Cf. the IRS site, tax regs, etc. for details. Something like the first $70K per year of income is not subject to taxes. Companies routinely protect their overseas employees by tax-protecting their offshore earnings. (And the tax protection is protected, so the companies protect _that_, etc. Fortunately, simple formulas for infinite sequence limits are available.) As this is not a tax forum, and I'm not going to do research for others, consult the Web. Google is your friend. --Tim May "As my father told me long ago, the objective is not to convince someone with your arguments but to provide the arguments with which he later convinces himself." -- David Friedman
On Tue, Jul 09, 2002 at 07:22:30PM -0700, Tim May wrote: | On Tuesday, July 9, 2002, at 06:30 PM, Anonymous wrote: | | > On 9 Jul 2002 at 14:02, Tim May wrote: | >> Unless one's stay is a short one (see below), income or other | >> money earned while in the U.S. (and maybe earned outside the | >> U.S. if the IRS can make a nexus case) is taxable. | > | > The question really is: Suppose one becomes a US citizen, and | > then resides outside the US. Then is money on earned on assets | > outside the US taxable by US authorities. | | Yes, but under expat tax rates. Cf. the IRS site, tax regs, etc. for | details. It seems that it may be similar to that for Green Card holders as well: http://www.techvisas.com/taxation.htm Adam -- "It is seldom that liberty of any kind is lost all at once." -Hume
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