any Americans living abroad? taxes?

Discussion in 'Taxes and Accounting' started by daytraitor123, May 5, 2009.

  1. I live and work on a visa in Tokyo.

    I have yet to start trading real money, but want to set it up right the first time when I do.

    It would be hugely beneficial for me to file taxes in Japan rather than the US for 2 main reasons

    1) I could pay much less in taxes
    2) Statement of income could be used to extend visa

    The easiest way would be to open a trading account in Japan, funded by a Japanese bank.

    The downside would be doing it all in kanji (the written language).

    I imagine I am not the only one in this situation. Has anyone figured anything out? I would very much appreciate your experience and response.
  2. What makes you think it is much less taxes in Japan?
  3. if you are an american you owe taxes in the us on income no matter where you made it or where you live less a few small expense exclusions.
  4. Surdo


    Another downside!

    Tax Base (Yen) Tax
    1 - 1,950,000 5%
    1,950,001-3,300,000 10%
    3,300,001 - 6,950,000 20% of base exceeding 3,300,000
    6,950,001-9,000,000 23% of base exceeding 6,950,000
    9,000,001 - 18,000,000 33% of base exceeding 9,000,000
    18,000,001 and over 40% of base exceeding 18,000,000
  5. If you're young you should consider getting another passport and dropping your US passport. You will probably still have to pay 10 years worth of taxes to Uncle Sam but still -- 10 years is not forever. And your children will not be a slave to Uncle Sam neither.
  6. Surdo


    You can get an exemption of $87,600 or so if you are a bonafied resident overseas.
  7. Wrong-o!...Sorry I guys I saw a bunch of false info here. have to chime in so nobody gets arrested. :)

    My first post...nice to see you, blah blah.

    I have been living overseas for 5 years.

    HERE is how it works.

    1. As stated...there is an income exclusion up to $87k. This is correct. The number grows slightly every year, that exclusion amount will change...grows with inflation.

    2. If you are an american you have to FILE taxes on income no matter where you are...not PAY nesecarily. I havent paid since I have been overseas.

    3. Here is the key..US vs. Non-Us Income. If your income comes from a US company or US sources...Taxes are the same. If your income comes from a company in another country...that is where the exclusion comes in.

    Example: you are a trader, and have an account in the US. you send income to yourself in Japan. Sorry amigo...that is US income.

    Here is the big question everyone asks: "How do I get around that"

    Answer: If you have a non-US company pay you, then you can control your income to where you dont go above the exclusion amount. Therefore, establish the equivalent of an LLC, S.A. or whatever company structure and have that open the accounts for you.

    However, Keep in mind that if that money goes TO YOU AS have to report it. If it stays in the foreign corporation, you owe taxes accoording to that countries tax laws.

    Unless you make good money, it may not be worth your time to go through the hooplah. I would say if you are a six-figure guy...start looking into it.
  8. I am only 33. I looked into this as well. Not bad idea, but when I looked into it Bush was still in power and giving up US passports was highly frowned upon.

    You have to understand that very few people give up US citzenship and you fall under a great deal of scrutiny for doing so. They assume you are doing somehting wrong and therefore put you under a microscope. You may get a pretty heafty investigation and tax audits for doing so.

    Not sure if it is true or not, but I was told that many peopel also went on the no-fly list to the US for giving up citizenship.

    And yes, you have to continue filing taxes for 10 years after renouncing.
  9. gangof4


    i see guys like you making these posts where you act as if you're projecting actual personal experience when all you've done is read what someone like you wrote. i challenge you to open your offshore llc and have that company open an account with interactive brokers for you to trade. every broker wants to see the corp. docs showing ownership of said corp along with your picture id- ie: passport. iow, this fantasy offshore corp will be as tied to you and your SS# just as it would have been if you'd just opened it in your name. the only way this 'works' is if you commit a felony and use other people's info (in which case, along with the legal issues you've created, you better trust that this person who has your $ in their name is REALLY trustworthy!), or put a shell inside of a shell company- which amounts to the same as above.

    if you attempt to disagree with me on this- don't forget to give an example of the structure that would be able to open an acct with IB without divulging your name and info. i use ib in my example because yes, you could maybe open an acct with some piss ant broker in Panama that is basically a laundromat for drug money vs someplace a TRADER would actually trade thru.

    lol. yeah, cracking 6 figures makes it worth it (rolls eyes). try 7+
  10. Wow...You sure are combative. try calming down a bit. I told a firend of mine the other day that I thought the main problem in the US is that people are so conflictual. You seem to be a perfect example of that.

    Here are your answers.

    1. Guys like me? what guys would those be? Yes, I am acting from personal experince as well make an income to refering people to a foreign introducing broker who opens accounts with the exact company you mentioned, IB. I have opened about 10 such accounts and have one myself. Some for US, some for canadian, some for other nationalities. I personally have an IB account using a non-US corporation. .

    2. You are assuming that People are trying to do something illegal..nothing illegal about it. US citizens can own and/or be offices of foregin companies, especially if they live overseas. Those foreign companies can open bank and brokerage accounts..what is wrong with that?

    3. Right, you have to fax or scan in the documents as well as supply 2 valid ids For each of the officers. They dont care if a US citizen owns it...again, it is perfectly legal. You need to also show proof of foreign residence. All they need to know is who has the money, who has control of the company, and that they can do a background check on that person.

    4. The structures that we us are S.A. Sociedad Anomimas...your country of residence will dictate the country you choose.

    5. Outside of the US people use corporations for EVERYTHING. We have a car in one, a house in one. etc. It is manily for liability purposes but very common. When I was head of Sales and trading for Scoita Securities here (yeah THAT is the kind of guy i am) we had far more accounts in companies than indvidual names.

    6. You will see on the IB intro page that they have corporate accounts in multiple foreign languages. Whom do you suppose that is for?

    7. Now, If you live in the US..dont try to hide money in a foreign corporation (i think this is where you jumped the gun and got all riled up) THAT is illegal. I live overseas, have a foreign address and the thread IS entitled "AMERICANS LIVING ABROAD"

    8. On of the disadvantages to doing this through IB or anyone else is that by using a corporation, you are assumed to be a pro, therefore you have to pay entitlement fees on all of the markets that you use. You cant get the "bundled US" options where entitlements are free like for individuals.

    9. Some company structures are explensive...say $3k a year. If you make over $100k, then the cost/benefit to this would be much greater than someone making $50k

    Now, I am not going to take offence to your filth banter. But I would ask you to cool your jets and ask questions in a more
    civilized tone next time.

    saludos and trade well.
    #10     May 5, 2009