海归网首页   海归宣言   导航   博客   广告位价格  
海归论坛首页
会员列表 
收 藏 夹 
论坛帮助 
登录 | 登录并检查站内短信 | 个人设置 论坛首页 |  排行榜  |  在线私聊 |  专题 | 版规 | 搜索  | RSS  | 注册 | 活动日历
主题: Foreign Earned Income Exclusion 2018 INVEST ABROAD & INVESTI
回复主题   printer-friendly view    海归论坛首页 -> 海归商务           焦点讨论 | 精华区 | 嘉宾沙龙 | 白领丽人沙龙
  阅读上一个主题 :: 阅读下一个主题
作者 Foreign Earned Income Exclusion 2018 INVEST ABROAD & INVESTI   
狼协
[博客]
[个人文集]




头衔: 海归元勋

头衔: 海归元勋
声望: 院士
性别: 性别:男年龄: -316
加入时间: 1970/01/01
文章: 25961
来自: 美国
海归分: 6039511





文章标题: Foreign Earned Income Exclusion 2018 INVEST ABROAD & INVESTI (1668 reads)      时间: 2018-9-04 周二, 02:30   

作者:狼协海归商务 发贴, 来自【海归网】 http://www.haiguinet.com

Foreign Earned Income Exclusion 2018
INVEST ABROAD & INVESTING OVERSEAS
By Christian Reeves
foreign earned income exclusion 2018
Share
The Foreign Earned Income Exclusion 2018 is $104,100. This is a nice increase, up from $102,100 in 2017. If you’re living and working abroad, the Foreign Earned Income Exclusion is your first and best defense against the IRS and the most important tool in your expat tax toolbox. Here’s how to maximize the value of the Foreign Earned Income Exclusion 2018.

The Foreign Earned Income Exclusion 2018 allows you to exclude up to $104,100 in salary or business income from your US Federal income tax return. The FEIE applies to your salary and not to passive income or capital gains.

Again, the Foreign Earned Income Exclusion 2018 doesn’t apply to investment or rental income. It ONLY covers salary or income from a business. So, when you sell real estate or stock, you will pay tax to the US.

The Foreign Tax Credit will prevent these capital gains from being double taxed, but you’ll always owe tax on your passive income.

The US capital gains rate is 20% (assuming Obamacare taxes are repealed) and the FTC gives you a dollar for dollar credit against taxes paid to a foreign country. So, if you pay 10% tax Austria, you’ll pay 10% tax to the US. If you pay 20% to Brazil you will pay 0% to the US.

Another way to look at the FTC is that you’ll pay a minimum of 20% in capital gains tax no matter where you live. If you live in Belize, with no capital gains tax, then you get the joy of paying the full 20% to Uncle Sam.

With that, let me get back to the Foreign Earned Income Exclusion 2018.

If you qualify for the exclusion in 2018, you can earn up to $104,100 in salary free of Federal income tax. If you earn more than $104,100, you’ll pay US tax on the excess (again, using the FTC to avoid double tax).

Let’s say you earn $204,100 from your job or your business. Let’s also assume you earn this money is in a tax free country such as Panama and only need to concern yourself with US taxes.

The FEIE gives you $104,100 tax free and you pay US tax on the remaining $100,000. Your Federal rate on this $100,000 will be about 33%. This is because the US tax brackets are applied to the full $204,100 earned and your taxed at the top of the bracket for your excess $100,000.

Note that I said that the Foreign Earned Income Exclusion 2018 allows you to exclude up to $104,100 of salary from Federal income tax. The FEIE applies to income tax, but not other Federal taxes.

For example, if you’re self employed, you still must pay 15% in self employment tax on 100% of your net business income. The FEIE does not reduce self employment tax.

Likewise, if you’re living abroad but operating a business through a US corporation, or getting paid from a US company, you must pay payroll taxes. The company will pay about 7.5% in payroll taxes and you’ll pay about the same, for a total of 15%.

However, if you operate through an offshore corporation, then you pay zero in payroll tax and zero in self employment tax. Salary from a foreign corporation is exempted from US SE and payroll taxes on IRS Form 2555.

Another benefit of an offshore corporation and the FEIE 2018 is that you can retain earnings tax deferred. Most foreign businesses can hold profits in the corporation and only pay taxes on when distributed as dividends.

So, if you net $500,000 a year, you might hold $400,000 in the corporation. You would pay yourself a salary of $100,000 and defer US tax on the excess until you distribute those retained earnings as a dividend.

There are two ways to qualify for the Foreign Earned Income Exclusion 2018. You can be out of the United States for 330 out of 365 days during a 12 month period or you can be a legal resident of a foreign country for a calendar year.Consumer Resource Guide

The easiest of these tests, at least on paper, is the 330 day test. Just be out of the US for the required number of days and you’re golden. However, in practice, most try to push their US days and end up taking significant risks.

If you miss your 330 days, even by one day, you lose the FEIE. No prorating and no exceptions… you get to pay US tax on 100% of your foreign income. Also, because you’re a US person, you lose the right to retain earnings in your offshore corporation!

The residency test is much more secure and reliable for most US expats. Become a legal resident of a foreign country, making that nation your home base, and you can spend 3 to 5 months a year in the United States. No more counting your days and no more risking the FEIE.

Also, President Trump is attempting to move to a residency based tax system. If successful, the 330 day test will likely be eliminated and residents will be allowed to exclude 100% of their income. No more US tax for residents of foreign countries in a territorial tax system.

In order to qualify for the FEIE using the resident test, you need to have a resident visa. I suggest that this residency visa come from a tax free country, but you can choose any nation. If you want to reduce your worldwide tax burden, go with a nation that won’t tax your foreign sourced profits.

While you can get residency in a number of low tax countries if you purchase real estate for $350,000 to $500,000, the lowest cost residency program is Panama. With Panama’s Friendly Nations Reforestation Visa you get residency for you and your family with an investment of $20,000. For more on this, see: Best Panama Residency by Investment Program

I hope you’ve found this article on the Foreign Earned Income Exclusion 2018 to be helpful. For more information on setting up a business offshore or getting a second residency, please contact me at [email protected] or call (619) 550-2743. We’ll be happy to assist you in structuring your affairs to maximize the value of the FEIE.

作者:狼协海归商务 发贴, 来自【海归网】 http://www.haiguinet.com









相关主题
[问题]关于foreign earned income exclusion... 海归主坛 2008-6-14 周六, 08:10
答功夫教授: "foreign earned income ex... 海归酒吧 2006-9-29 周五, 18:14
[问题]foreign income/housing exclusion 海归主坛 2007-5-12 周六, 12:18
Foreign Tax Exclusion in Practice 海归论坛 2007-5-04 周五, 11:34
【我的2018】致我所有的朋友,无尽的感激尽在回顾中 生活风情 2019-1-16 周三, 16:52
海石:【青花瓷】告别2018迎接2019,新年好! 高山流水 2019-1-01 周二, 15:23
海石演唱【风请你告诉我】祝大家2018新年愉快! 高山流水 2018-1-01 周一, 14:49
Electronic business of foreign trade/... 海归招聘 2015-9-01 周二, 00:26

返回顶端
阅读会员资料 狼协离线  发送站内短信 浏览发表者的主页
  • Foreign Earned Income Exclusion 2018 INVEST ABROAD & INVESTI -- 狼协 - (5930 Byte) 2018-9-04 周二, 02:30 (1668 reads)
回复主题   printer-friendly view    海归论坛首页 -> 海归商务           焦点讨论 | 精华区 | 嘉宾沙龙 | 白领丽人沙龙 所有的时间均为 北京时间


 
论坛转跳:   
不能在本论坛发表新主题, 不能回复主题, 不能编辑自己的文章, 不能删除自己的文章, 不能发表投票, 您 不可以 发表活动帖子在本论坛, 不能添加附件不能下载文件, 
   热门标签 更多...
   论坛精华荟萃 更多...
   博客热门文章 更多...


海归网二次开发,based on phpbb
Copyright © 2005-2020 Haiguinet.com. All rights reserved.