The U.S. is the only country that taxes its citizens on their worldwide income, no matter where they live and regardless of how long they have been overseas. Well, actually the U.S. is almost the only country. Eritrea has what is known as a “diaspora tax” on its citizens.
US citizens with ownership interest in a FOREIGN company must file the equivalent of a US tax return for that corporation through form 5471 – EVEN THOUGH THE US HAS NO JURISDICTION OVER THAT ENTITY!!!
A recent study conducted by the Treasury Inspector General for Tax Administration (TIGTA) indicates that a large number of taxpayers living abroad are calculating incorrectly one of the most important elements of their tax return: The foreign earned income exclusion.
What to do if you have not filed a US tax return in several years and live abroad.
The US reduces your income tax liability dollar for dollar for any taxes paid to a foreign government. This comes in especially handy when your wages exceed the foreign earned income exclusion, but there are several points to keep in mind, as the “dollar for dollar” part of the definition can’t unfortunately be taken verbatim. It was intended to avoid double taxation of US taxpayers.
UN Pension Guide (Attached) States their plan is qualified as described in section 401(a). As Such, contributions are not taxable in the year earned and
Everyone knows that to qualify for the foreign earned income exclusion you must meet either: – The bona fide residence test– The physical presence test.Right?Wrong.