IRS and Foreign income for US citizen

YEP says on Feb 1, 2005, 05:12:

Out of curiosity how would one set on self up if one had an
income from "homeland" US/EU and would contribute his/her fair share of taxes and keep savings somewhere else (read tax-free haven) ;-)


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Just another scandinavian getting ready to explore South America

------------------------------------------------------------------- Just another scandinavian getting ready to explore South America

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lpdiver says on Feb 1, 2005, 05:23:

Off shore corporation Belize comes to mind, costs about $1,500.00

"cook some rice!"

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YEP says on Feb 1, 2005, 05:31:

Don't hold yourself back ..... people just throw in the facts
I like very hands on information on that topic.

TIA (= Thanks in advance)


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Just another scandinavian getting ready to explore South America

------------------------------------------------------------------- Just another scandinavian getting ready to explore South America

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Mr. Hollywood says on Feb 1, 2005, 07:10:

Right idea, wrong numbers The IRS exemption for foreign earnings is actually $90,000. It's per individual, doesn't matter if you're married.

If married, both spouses get a $90,000 exemption for their individual earnings but one spouse's exemption cannot be applied to the other's income.

Like GIB says, if your taxman doesn't already know this stuff, it's time to get a new one.

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cremaster says on Feb 1, 2005, 07:23:

Yep go to:

www.escapeartist.com

It´s full of info on tax-havens, and tax-avoidence articles.
It´s not the easiest site to navigate, though

Patrick

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lpdiver says on Feb 1, 2005, 07:39:

Also The exemption requirements are that you must me out of the country for 11 months out of any consecutive months. Actually the regulation is specificic down to the days and whether flying days count etc.

A note of interest pre 9-11 days may Americans flew into Canada and crossed on their drivers licenses and were careful to spend only cash and leave no paper trails in order to fudge on the days out of country requirement. I suspect that loophole has been securely slammed shut.


T

"cook some rice!"

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Mr. Hollywood says on Feb 1, 2005, 08:00:

According to my tax guy My tax guy said that the burden of proof of the 330 days out of 365 out of country falls on us, not the IRS. His advice was to ALWAYS ask immigration for a stamp going into and exiting the USA.

I'm sure the Canada/Mexico loophole still works if people are meticulous about not creating a paper trail.

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lpdiver says on Feb 1, 2005, 08:12:

Tinto I am not advocating fraud but the few instances I have heard about this type of thing the person maintained a residence out of the country for the full time. In one case a loved one got sick and the person flew into canada and crossed the border in a paperless fashion to be with his mother that died.

I'd hate to be caught in anything fraudelent with the IRS...lol or immigrations for that matter. In my case I simply took a menial job in another third world country making just enough to pay living expenses for two months.

This saved me a bundle in taxes.

"cook some rice!"

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Mr. Hollywood says on Feb 1, 2005, 09:01:

Tinto, I think you misunderstoood what lpdiver was talking about when he mentioned using Canada as a loophole. He wasn't saying that people created ficticious foreign residences but that one could more easily enter and exit the US by land (ie. crossing from Canada into New York) than you could cover up having flown in through JFK or Miami.

Personally, I never think lying to the IRS is a good idea.

I also believe the tax benefit is prorated if you don't quite make the 330 day requirement, so it's a lot of effort and potential problems for a very small gain.

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lpdiver says on Feb 1, 2005, 10:17:

Tinto It is all or nothing. You miss it by a day you get zilch, zero, nada, zip.

You are correct in your assumption of what I was refering to. I guess it would be the equivalent of entering and exiting undocumented. Again I am not advocating this practice but do know it used to exist. I doubt it does anymore.

In my case residing/working in Trinidad for an additional two months allowed me to exclude about 87,000.00 from federal taxes...a substantial chunk of money for me anyway.

Tony

"cook some rice!"

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YEP says on Feb 1, 2005, 10:57:

he he ..... OK I can't use the US inspired advise you're giving up there as I'm not from the US (plz watch the little salute at the buttom of every post of mine).

But moving ones "personal corp." to some "Nice" spot and recommendations on good solid banks to use would be nice to know ;-)

Just like "Coca Cola" do their thing (allthough they're a little bigger than my micro-thing ;-) )

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Just another scandinavian getting ready to explore South America

------------------------------------------------------------------- Just another scandinavian getting ready to explore South America

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lpdiver says on Feb 1, 2005, 11:00:

YEP You can still set up the offshore corporation but you need an employer willing to pay you there. Belize is very friendly towards this deal.

T

"cook some rice!"

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YEP says on Feb 1, 2005, 12:08:

Really ;-)
I do understand that ;-)


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Just another scandinavian getting ready to explore South America

------------------------------------------------------------------- Just another scandinavian getting ready to explore South America

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Mr. Hollywood says on Feb 1, 2005, 12:21:

Due diligence I highly recommend that US residents read IRS publication 54. "Tax Guide for US Citizens and Resident Aliens Abroad."

It's available as a .pdf on the IRS site.

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