Let's say if I go live in some other country with a flat 10% tax like Russia (I speak Rus) and trade the US e-mini futures from there, for instance, will I pay taxes to US or to Russia, or both?
To make it simple, if your residency is in Russia you'll pay taxes in Russia. If you have an american passport it's a special case as even if you live abroad you still have to pay a small tax to the USA. Ninna
As long as you meet the requirements, you would be able to take advantage of the foreign earned income tax exclusion each year. For 2011 it is $92,900. Any income after that would be subject to the appropriate tax rate for your entire income. IOW, if single you would start at 28%. The good part is that you would get a tax credit on the 10% paid to Russia, but only on the amount above the 92,900. Example: You make $200,000 in trading gains this year in Russia which is subject to a tax of 10% over there. Tax paid to Russia = $20K Tax paid to US = (174,400-92,900)*.18=$14,670 (200,000-174,400)*.23=$5,888 TOTAL if living in Russia = $40,588 which is about 20% If you traded 1256 contracts you would end up paying about the same amount if you stayed in the US. The question is always whether it is really worth the trouble.
Thanks a lot!!!! Yeah, looks like it ain't worth it. That applies to any business, not only trading??
Yes, it is any business. Any income. The kicker is that most people want to retain their US citizenship. You actually have to pay to be a citizen of the US. There aren't any legitimate ways that I know of to hide foreign income from US taxation without giving up your citizenship. Of course there are people who have done that but most of them regret it in the end, as a decision to simply save a little money. The US g-ment even goes so far as to tax a company that acquires earnings outside the US and then wants to bring those earnings back into the US economy.
"The question is always whether it is really worth the trouble" Bingo. Almost always not - for sure. Funny how they have that figured out. Death and taxes.
Marry a woman from a country where there are no or very little taxes on capital gains. Make sure that she doesn't get the US citizenship, just the green card. Pay taxes separately and she should be paying taxes to her homecountry, no double taxation.... Oh yes, the trading account is set up under her name, obviously... Here is a list to help to pick a country: http://en.wikipedia.org/wiki/Capital_gains_tax Ladies from Jamaica, Belize, Croatia (I think), Egypt, Mexico,Switzerland,Turkey among others are perfect choices.
Nope, it is classified as "source income" and is subject to 30% tax in the US unless the tax treaty with that particular nation specifies otherwise. the only way to get around it is if the spouse has no green card and is in the us less than 183 days during that year.
Alright, then tell her not to get the green card.... Similarly, you don't even need to get married, just find a person (male/female doesn't matter) who can open a trading account under his/her name and for a small fee, you trade under their name... Of course trust is an issue, that's why the marriage is a better way...