Tag Archive for Expatriate Tax Advisor

U.S. Expatriates Offshore Banking: Best Countries For Overseas Banks

Olivier Wagner, Best Banks For U.S. Expatriates, Expatriate Tax Advisor

We are regularly asked about expat offshore banking, best overseas countries, and banks for US citizens. It’s a well-known fact that a right bank can save money for US citizens traveling or living abroad. Many Americans abroad are looking into ways to invest through financial institutions. It can be either in their place of residence, in popular financial city centers or in offshore destinations. When choosing a bank, everyone usually pays attention to following criteria:

  • ease of opening,
  • Investment access and liquidity,
  • taxes,
  • asset protection,
  • foreign transaction fees,
  • exchange rate used to convert foreign transactions to USD,
  • wire transfer charges,
  • customer service etc.

Read further if you want to learn more about opening an overseas bank account as an American abroad.

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Written by | Posted in Best Banks For U.S. Expatriates

Form 1116: What Is The Catch?

Virtual Tax Advisor

Although Form 1116 is a great benefit, there are some limitations to this tax credit that you should be aware of.

  1. The money earned needs to be subject to income tax in the foreign country. Unfortunately, you cannot use the credit to offset the cost of the property or other taxes paid abroad. Income only!
  2. The credit can be up to the amount you paid the foreign country. However, it is limited to no more than the percentage of your income that was earned overseas. So if you only earned 40% of your income in a foreign country that was subject to taxation abroad, then you cannot take a deduction equal to more than 40% of your U.S. tax burden.
Look At Expat Example Using Foreign Tax Credit

Mark and Sylvia have been living and working in Spain for three years. They are full-time residents and earn all of their foreign earned income through the Spanish companies they work for (perhaps, you can relate to this example of how to claim the Foreign Tax Credit):

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Written by | Posted in Foreign Tax Credits • Form 1116