Are you a bonafide Australian resident who is also a U.S. citizen that is trading U.S. stocks or futures through a U.S. broker? If so, could you shed light on how you pay your taxes because after reading the tax treaty and consulting with international tax accountants I'm still unsure of a few things. The international tax accountants I've been in contact with are giving me advice on just the Australian tax law or just the U.S. tax law. I have yet to find one who can put the two tax laws together and give me sound advice. This tax query is starting to get expensive so perhaps someone who has some experience on the matter give his or her .02 before I go looking for a qualified international tax attorney. My main concern is this: If I am treated as a trader by Australian tax law but still treated as an investor by the IRS, and because my tax home is Australia (I have not been in the U.S. in three years) could I file with the ATO (Australian Taxation Office) my share trading business income and then file with the IRS my foreign earned income? Before Australian residency my IRS filings in the past have just been short term capital gains where I report it on form 8949 but for tax year 2016 I think I could skip populating form 8949 and just report my foreign earned income and then claim a foreign tax credit. It's weird though because my broker is U.S. based and my broker sends my trading statements to the IRS--but my office and residency is in Australia. By the way, I could elect for mark-to-market with the IRS and also go for trader status under U.S. tax law but I do intend to live in Australia for a long time so perhaps that would be a waste of energy. Besides, trader status is easier in Australia than in the U.S.,; though, I believe I qualify for U.S. trader status since trading is my only source of income and the longest I will hold a trade is six hours. I also conduct trades and research daily according to my business plan.
American expatriates have to pay both local, and IRS taxes. One could offset the burden of the other. There is a reason why so many Americans who've been living overseas for years are renouncing their citizenship. The Aussies have been handing out their Western passports for decades to people who don't like Western civilization. Why don't you get one?
Lived there for four years until 2011. Awful situation tax-wise to be in, AU temporary and US permanent. They both nail you, you file at different times of the year. We had to go to an expert, I'm afraid.