Tag Archive for Foreign Income

US Treasury Proposes That Foreign Income Subject To High Foreign Tax Be Excluded From Definition Of #GILTI

John Richardson On Foreign Income

In general – Good News For American Entrepreneurs Abroad …

On Friday June 14, 2019 US Treasury proposed in Notice 2019-12436 that any foreign income earned by Controlled Foreign Corporations be (subject to election) excluded from the definition of GILTI income. This will be particularly welcome to Americans living outside the United States, who are attempting to carry on business in their country of residence, through non-U.S. corporations.

For those who are concerned with understanding the hows and whys, I suggest you read Treasury’s Notice which includes a good history and description of the Subpart F rules, some Legislative History leading to the GILTI rules, and Treasury’s attempt to piece it all together. You will find it all here.

Treasury Notice 2019-12436

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Written by | Posted in GILTI Income

No More Hide N’ Seek For Taxpayers’ Overseas Assets

IRS Is Ending Its Offshore Voluntary Disclosure Program

The IRS is ending the Offshore Voluntary Disclosure Program (OVDP) this September 28th. This program has given U.S. taxpayers an opportunity to come forward with ‘previously undisclosed foreign income, accounts or assets with the promise and certainty that they will not face criminal prosecution.

Since the program’s inception in 2009, over 56,000 US taxpayers have paid over $11.1 billion in back taxes, interest, and penalties through the OVDP, but the number of participants has steadily declined over the past few years – from 18,000 in 2011 down to only 600 in 2017.

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Written by | Posted in Foreign Income • IRS • OVDP • Overseas Investments

5 Things To Know About IRAs For U.S. Expats

As an American living and working abroad you better be fully armed with a knowledge regarding IRA for US expats, its’ opportunities and tax savings you can achieve. For example, do you know that depending on your foreign income you may or may not contribute to your regular or Roth IRA as an American abroad?

A lot of US expats qualify for the Foreign Earned Income Exclusion and they choose it to exclude the first $102,100 (as of the 2017 tax year) of foreign wages or self-employed income from the US federal income taxes. But not so many people know that if you are using the Foreign Earned Income Exclusion, then you signed yourself to its restrictions on your contributions to an IRA. Read further to find out more about it.

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Written by | Posted in Expatriate • Expatriate Taxes • Foreign Earned Income • IRA • Roth IRA

Expat Guide To Foreign Tax Credit Carryover

As an expat, no matter where you live and work, your US and foreign income is subject to IRS taxes. The fact that the majority of countries around the world also require you to file and pay tax locally makes the matter even more complex. In order to avoid double taxation, the US allows you to take a Foreign Tax Credit based on the foreign taxes you pay to your resident country. The Foreign Tax Credit is subtracted directly from your US income tax. However, if you cannot claim the full credit amount, you are allowed a carryover. Carryovers do expire, though, so read on to find out how best to utilize this savings! Read More

Written by | Posted in Foreign Tax Credits