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Discuss working and making a living overseas, starting a business, or studying abroad.
3 posts • Page 1 of 1
If you earn income in another country do you have to pay taxes in that country but also do you have to report your income to the US IRS and pay taxes on that?
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Ghost has it right. It's a good deal.
Some places won't tax you at all if you're new there (4 years in Colombia, also possibly Portugal) or there less than 6 months (most countries) or if you get paid into a US account and work online (Mexico, most Latin countries).
If you earn over 100k, or if you have some "unearned" trading profits or rental income or whatever, usually you can still just pay one country's tax, not both. The US has treaties with most high-tax countries, so they give you credit for what you already paid.
The only catch is to file the form 2555 "FEI Exclusion" form for expats ONTIME before April 15.
Also if you have over ten grand in bank or other liquid assets, file an FBAR form after January 1.
Those last 2 items are important. Everything else is no biggie.
Some states still want you to file state tax if you are going to be returning to that state. California does this, Virginia and several others. If you keep a home to return to, they'll figure that was your home all along. Basically if you can move to a state that doesn't care what you do abroad, like Georgia, before you go overseas, that's ideal. Of course if you have no income in that state, and you never return to that state, they can only pine away for you.
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