Being a US American and given that the first $90’000 or so in earned income is tax free. How does that affect earned income from US stock investments. Are these tax free also up until the $90,000 or so limitt in combined income? Still trying to figure out US tax affects for someone living overseas.
Also what would be the optimal way for someone in my situtation to invest. Would you invest in a Roth Ira etc…?
I seem to recall reading that ex-pats are only taxed on income over a certain level as long as they can demonstrate that they paid taxes in their country of residence. Was kind of a footnote in the semi-recent rash of articles about ex-pats complaining about all the forms they have to file with the IRS and all the information they have to disclose.
AFAIK, you get a tax credit on foreign taxes paid, but you still owe tax starting at $20k or so (MFJ).
And you won’t owe tax on qualified dividends or LT capital gains as long as taxable income is
edit - Let me also disclaim that I only have one ex-pat client, and he has a significant pension. He doesn’t earn any money in Thailand, so he doesn’t get any foreign tax credit. And he pays tax starting at $20k (MFJ). If he worked and earned income in Thailand, then things might be different.
Moved to a tax free country so my taxes are based on the US limits only. Tax free untill $99,200. However i got some investments made in the US while living there. So im not sure where i fall tax wise with these investments.
^ huh? i only really know the Canada-US tax arrangement but the treaty basically works such that you pay U.S. taxes or Canadian taxes, whichever are higher. hint: it’s Canadian taxes. i can’t imagine that U.S. would let you pay nothing if a tax treaty with a country in which its values and economies are most integrated says, you must pay the most…
^ well their is no taxes here. But america taxes all US citizens living and earning money abroad if they make more than a certain amount. It increases every year. Currently at $99,200. So if you make more than that, marginal taxes starts to kick in based on US income tax rates.
It’s simple, you probably owe tax on them. I’m making assumptions here since you didn’t say what kind of investments they are. If it’s US sourced income - which I think it would be classified as if it’s held through a US brokerage account, you’ll get a 1099 and all that.
Lets not make this into what it isn’t. The US still taxes you on your worldwide income, but it you live and work abroad and happen to meet a number of requirements, they let you exclude up to a certain amount from taxation. This year its $100,800 for 2015 (you got the amount wrong).
For the first time since leaving the states I got to use the rule where you ignore the foreign income (if under $93K). Usually I make too much. So no additional taxes on that (already paid local taxes). But the US stock dividends/gains I did not treat as part of the $93K, since they are not foreign income. Anyhow, could the USA make this stuff any more retarded?? I was doing the Qualified Dividends worksheet, and it’s like written by a moron. Thirty steps of circular logic, no point. And same as every year I found errors in their materials. Incompetence.
Well it’s late here and talking accounting requires coffee…but I think you just do a 2555-EZ to clear your foreign income, a Schedule D and 8949 for gains/losses, and dividends (ordinary and qualified) get listed on the 1040 line 9. Then calc your deductions to get taxable income. Then consult the tax table and see what you owe.