For U.S. taxpayers residing overseas, contributing to a Roth IRA offers a powerful opportunity to build tax-advantaged retirement savings over the long term. However, the rules surrounding eligibility can be complicated, particularly when the foreign earned income exclusion and international tax treaties are involved. This article explores the key considerations expatriates need to consider when [...]
What is Form 8833? Form 8833 is a document that taxpayers must file with the Internal Revenue Service (IRS) if they are claiming a treaty-based return position. A treaty-based return position is when a taxpayer is claiming a tax treaty benefit that overrides the Internal Revenue Code (IRC). Form 8833 is used to disclose the taxpayer's position and provide the necessary information [...]
Planning to sell your main home but concerned about the U.S. tax on the capital gain from the sale of your main home? You may want check if you can utilize the sale of home exclusion before selling your main home. What is the sale of home exclusion? If you are a U.S. citizen or [...]
In times of economic difficulties or when cash flow is not consistent, you may apply to the Hong Kong Inland Revenue Department for a deferral of tax payment to help you get through financial difficulties. For example, a large one-time bonus not expected to be receive in the next year. One option is the holding [...]
We have assisted many clients earning share awards as employee compensation for the services performed. These awards may have vesting conditions on grant date. As an overly simplified explanation, grant date is when an employee receives property such as a share award from the company. The vesting date is when an employee has received the [...]
As an investor it is common to have worthless securities and, in such cases, a taxpayer would prefer to claim a loss to reduce the amount of taxes due. Here are a few general questions and two examples on investments in worthless securities: What is a worthless security as defined by IRS? Worthless security is [...]
In Hong Kong many of our clients commonly claim the foreign tax credit benefit while living abroad. The foreign tax credit prevents the dreaded double taxation by allowing taxpayers a dollar for dollar tax credit for foreign taxes paid. For many taxpayers, claiming a tax credit is more beneficial than claiming a tax deduction. However, [...]
Introduction to a 529 Plan: A 529 plan is designed to encourage saving money for future education costs. The tax-advantaged savings plan has two types, including prepaid tuition plans and education savings plans. Prepaid tuition plans: A type of 529 plan that lets an account owner purchase units or credits at participating colleges or [...]
Or see video here: Foreign Earned Income Exclusion for U.S. Taxpayers living abroad If you are a U.S. citizen or a U.S. resident alien living in a foreign country, you are subject to the same U.S. income tax laws that apply to citizens and resident aliens living in the United States. One potential benefit for [...]
What is the Standard Deduction? The standard deduction is a specific dollar amount that reduces the amount of income on which you're taxed. Your standard deduction consists of the sum of the basic standard deduction and any additional standard deductions for age and/or blindness. In general, the standard deduction is adjusted each year for inflation [...]