The best tax avoidance scheme for someone like yourself living in the US is to simply trade from an LLC or an S-Corp and pay yourself a salary so that you can contribute to a pension plan. Yes, you will have to pay FICA but you will be allowed to set up a profit sharing plan/401K combination that will allow you to tax defer 44K of your first 120K in earnings. Leaving you to pay taxes on only 76K. With a few deductions and perhaps some mortgage interest and property tax deductions as well you will harl=dly be paying any federal taxes. In fact, I would bet that your airline tickets to eastern europe for your family will cost more, ha! Now if you really are a great trader you can trade the shit out of your pension and pay no taxes on that (until you retire of course). If you want to cut out another 6% simply move to a state with no payroll taxes and viola! This really is the best option for most folks who are not making millions of dollars a year. Remember, even if you renounce your US citizenship you will still be taxed by th US govt for 10yrs after you renounce. If you don't pay then you will have warrants out for your arrest and you will be jailed if you ever visit this country again. Renouncing a citizenship and moving abroad is one thing if you are wealthy, but I doubt it will be as pleasant as you envision for a guy with 180K.
Pekelo's guide to how not to feel bad about those "insanely" high US taxes: 1. Marry a Swedish woman and move to Sweden. 2. Pay Swedish taxes for a year. As high as 80%. 3. When you start to feel the pain, move back to the States and feel good about yourself and enjoy life.... On the other hand you could limit your state taxes of picking from the list of states where there is no statetax. You could save a 5-7% of your income... P.S.: Quatar and Bahrain have no income tax of any kind.
Actually Joe I agree with your scenario of write-offs against 180k. I would be moving for political reasons too, but I won't stray off topic. Regarding the 10 year bill, I believe that is only if they can prove you are leaving for taxes, which I would not be.
Ah, I wasn't aware of that. Also, I think was getting you confused with the guy who started this thread. Joe
So basically what you are saying is to form an S-Corporation or an LLC (S-Corporation flow thru profits?), set yourself up as an employee of that corporation, and then trade thru that corporation and make the corporation pay you a salary? Am I getting this right? If so question is does this satisfy the NASD? For instance you are a remote Bright trader and a member of their LLC. Bright would pay you a "salary" on your gains and you can purchase for instance health insurance, and set up an IRA thru the LLC for a tax deduction (can't deduct personal health insurance I believe)? Is this what you mean?
1) you will pay FICA on any earned income. As stated, there are several methods to limit the amt paid however. You DO pay both sides, not just one side (you will pay 15%, depending on amt earned). 2) if you don't want to pay any FICA, just take it all as cap gains. If a futures trader, 40% will be taxed at long term rate. Overall, you will pay no more than about 25%, depending on how much you actually make. Little paperwork as well. No contributions to any tax deferred acct though. 3) payroll taxes are federal, not state. (FICA). 4) it is true the US only chases after your income for ten years if you are obviously avoiding taxes. These days, its very easy to leave based on political reasons. Also, just get citizenship in a high tax country, but don't live in it! The US will not peruse you in this case. Personally, I'm not selling my US passport for any amt of money. jay
<<<Pay Swedish taxes for a year. As high as 80%.>>> Is it really that high? Why do swedish people work for? I would opt for a homeless job instead.
There is a gigantic amount of horsesh*t talked about tax avoidance. You can legally avoid taxation. Of course cheating and tax evasion is just plain dumb ignorance as much as it is opening yourself to be found out for breaking the law.
wow...i live overseas..there are a bunch of guys here that have no idea what they are talking about....let me go back through these and clarify some things...
not true. if you live overseas more then 11 months out of the year the first 8-k is tax exempt, no matter where the earnings come from.