living abroad and getting income from us

[ketanco]

i am naturalized us citizen and thinking to go back to my country permanently soon. when i move outside the US, i will still have income sources from the US, such as the ad revenues from my website, or the revenues from the book i will have published. they will go into my us checking account. i will not have any address in the US. when doing my schedule C, when i use a foreign address, does it complicate things, such as extra paperwork? or i just make one schedule C as usual (only with a foreign address)?
after moving out of us, i will not have anything remaning in the US, except my bank and credit card accounts. based on this i will not also have to do any state taxes correct?

i know that i will have to do other paperwork related to my foreign income, but my question above is just concerning my US income.

[Harold Mansfield]

i am naturalized us citizen and thinking to go back to my country permanently soon. when i move outside the US, i will still have income sources from the US, such as the ad revenues from my website, or the revenues from the book i will have published. they will go into my us checking account. i will not have any address in the US. when doing my schedule C, when i use a foreign address, does it complicate things, such as extra paperwork? or i just make one schedule C as usual (only with a foreign address)?
after moving out of us, i will not have anything remaning in the US, except my bank and credit card accounts. based on this i will not also have to do any state taxes correct?

i know that i will have to do other paperwork related to my foreign income, but my question above is just concerning my US income.

I don't know the answer to all of your questions, and I highly recommend that you consult an actual accountant or tax attorney to give you concrete answers, but I do know these things:



You can't continue to have a US checking account without a US address. I can't think of one bank that would let that fly.
If you have US income, you will pay US taxes. I don't care where you technically live.
If you are a US citizen your income from elsewhere in the world is taxable.
Whether or not you pay state taxes depends on the state you have your address and bank account in.


Basically the scenario you are describing does not absolve you from paying US taxes on ALL of your income as long as you are a US citizen. You can't have it both ways. If you don't want to pay US taxes, then move out of the country, take your money with you and officially renounce your citizenship. You are then at the mercy of whatever the tax laws are where ever you end up.

[Freelancier]

i am naturalized us citizen and thinking to go back to my country permanently soon.
Which "my country" do you refer, since you are a US citizen...?

[ketanco]

well thanks for the long answer and time, but you did not understand my question at all , and gave no answer but just blamed me of trying to avoid taxes etc...

i am nowhere saying i want to avoid paying taxes to usa when i move abroad. read my question again. i am asking what happens when you write a foreign address when you make schedule C. making schedule C means, filing taxes. when a foreign address is written on schedule C (and it is possible to write foreign address there), what happens, is there any additional tax forms or paperwork, because they consider it business done overseas? - but in my case it is not correct, as the business is still done in the US, as i described in my original question... so it is a grey area to me... this is my question.... and as far as state taxes, what happens, when i do not maintain a US address.

and no, you know it wrong... you are able to have a foreign address with a US bank, if you move overseas.. i just called my bank in the US, a major US bank, and verified this. you can do the same to learn...

by the way it is none of your business to tell me where i say "my country". i got my usa passport by staying long years, abiding by laws and working and paying taxes, waiting in green card and then citizenship line for many years, which messed up my whole life due to long wait, and i totally deserved it, but i still maintain my native country passport too, and it means where i feel i am from. of course usa is also my country. it is not your place to tell me what to say....

and yes i will talk to an accountant too of course... i just wanted to get extra opinions or ideas here, before paying consultation time, so that i may ask more informed and intelligent questions with more info...

[billbenson]

ketanco, don't get so snitty. I'll still answer your question to the best of my ability though.

I am a US citizen. I spent all of the 90's working for a US company but living outside the US. I had a bank account with Citibank and no US address other than a US freight forwarder in Miami. It was used mostly for mail though.

I did not need to pay income taxes.

That's a long time ago and things may have changed. As everybody stated including yourself, talk to an accountant.

[Freelancier]

by the way it is none of your business to tell me where i say "my country".Who exactly do you think told you that? Have you stopped to maybe consider that the exact two different countries in question matters because of tax treaties that control which countries are going to tax you? Perhaps not.

[Harold Mansfield]

Dude, calm down. No one is accusing you of trying to avoid taxes. I answered exactly what you posted. You will be liable for your US income, plus whatever the tax laws are of where ever you are living. You cannot have a checking account at a US bank without a US address. If you're a citizen, all you income is taxable. State taxes aren't the same as federal . Every state is different, so we can't answer a general question about a mystery state.

Instead of yelling at us for answering exactly what you have posted, why don't you just go to the IRS website where the information you seek is there for you to learn for yourself?
Publication 54 (2014), Tax Guide for U.S. Citizens and Resident Aliens Abroad (http://www.irs.gov/publications/p54/)

If that's not the exact page you need, Google search the IRS till you find the one that applies to you. It's all there for you.
Problem solved.

[billbenson]

Dude, calm down. No one is accusing you of trying to avoid taxes. I answered exactly what you posted. You will be liable for your US income, plus whatever the tax laws are of where ever you are living. You cannot have a checking account at a US bank without a US address. If you're a citizen, all you income is taxable. State taxes aren't the same as federal . Every state is different, so we can't answer a general question about a mystery state.



With all due respect Harold, I legally paid no income taxes while living in Central America. I paid taxes where I was living which was not the US.

There are plenty of banks with locations in the US and abroad. Banking is not an issue.

[Harold Mansfield]

With all due respect Harold, I legally paid no income taxes while living in Central America. I paid taxes where I was living which was not the US.

There are plenty of banks with locations in the US and abroad. Banking is not an issue.

So you are saying that you had income from the US, but paid no US taxes? This is what the OP is asking about. Income from the US, living abroad and while being a US citizen.

No banking isn't an issue, plenty of international banks. But a US only based bank will require a US address.

[billbenson]

So you are saying that you had income from the US, but paid no US taxes?

That is exactly what I mean. At least at that time the US didn't require you to pay income tax if you reside outsid of the country. I'm only referring to income tax. I don't recall about other taxes.

[Freelancier]

At least at that time the US didn't require you to pay income tax if you reside outside of the country. I'm only referring to income tax.It's country-dependent. In some countries you are double-taxed, in others not taxed at all (because it's a tax haven and won't reveal income/tax information to other countries) and in some you get credit on your US tax return for taxes paid locally. It depends on the tax treaties between the countries and the level of transparency with those tax treaties. Central American countries were mostly opaque until a few years ago and now they're all falling over each other to sign tax treaties.

[Harold Mansfield]

That is exactly what I mean. At least at that time the US didn't require you to pay income tax if you reside outsid of the country. I'm only referring to income tax. I don't recall about other taxes.

I can only relate to military and citizens working abroad. You pay taxes. I suspect your situation had a few more details such as maybe you didn't receive income from any US sources. But as a citizen, your income is taxable no matter the source.


If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

Source: U.S. Citizens and Resident Aliens Abroad (http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad)

[billbenson]

All I can tell you is I worked for a multimillion dollar international company with a team of accounts and they didn't take any taxes out of my check. Could be different today.

[Harold Mansfield]

All I can tell you is I worked for a multimillion dollar international company with a team of accounts and they didn't take any taxes out of my check. Could be different today.

That's probably the moral to the story right there. You had accountants who knew what they were doing.

[ketanco]

So you are saying that you had income from the US, but paid no US taxes? This is what the OP is asking about.

No... I am not asking that.... for the 2nd time... please read my question.... i only asked what happens (as far as any additional paperwork), when you write a foreign address on schedule C. Making schedule C means, filing taxes...

[Freelancier]

when you write a foreign address on schedule C
Nothing. It's an address. Unless it triggers something found in the tax treaties between the countries. Then something. See an international tax accountant familiar with both locations to get more specifics for your situation. :)

[Harold Mansfield]

No... I am not asking that.... for the 2nd time... please read my question.... i only asked what happens (as far as any additional paperwork), when you write a foreign address on schedule C. Making schedule C means, filing taxes...
Yeah, sorry. Seems like you're intentionally making it confusing. Are you living out of country or not?
What do you mean, "When you write a foreign address?".

If you're living out of country, I gave you 2 links that show what your responsibilities are for citizens living abroad regardless of your income source.

Answers to your questions from the source:
Publication 54 (2014), Tax Guide for U.S. Citizens and Resident Aliens Abroad (http://www.irs.gov/publications/p54/index.html)

[ketanco]

Yeah, sorry. Seems like you're intentionally making it confusing. Are you living out of country or not?

If you're living out of country, ....

For the 3rd time... read my original question... I said "I am planning to move out of the country soon"....

I appreciate the effort... I will talk to an accountant....

[Harold Mansfield]

For the 3rd time... read my original question... I said "I am planning to move out of the country soon"....

I appreciate the effort... I will talk to an accountant....

And for the 3rd time, here are the answers to your questions from the source:
Publication 54 (2014), Tax Guide for U.S. Citizens and Resident Aliens Abroad
(http://www.irs.gov/publications/p54/index.html)

[Leo]

Hi Ketanco,

This discussion is getting heated up, so I say this to all parties involved: "No Biting!" :)

Now to the answer:

I am a US Resident, who also teaches online at a university. My wife and I are planning to live in Europe for a number of years (we have dual citizenship), so I would continue to receive income from the US university, doing the direct deposit into my US account. Because of that, I have done quite a bit of reading on this matter.

The difference is that I own my home and will retain it while I am away, but for the purposes of this discussion let's talk exclusively about taxes and not about place of residence or what banks allow members to do or not...

You have to pay taxes. Income generated in the United States are subject to income taxes. Same with interest earned on your accounts. For all intents and purposes, you can do some reading on how expats pay income taxes. Whether or not you were born here is not the case, just that you are generating income in this tax year.

The question that I would pose (and here I go answering what was not asked): The country that you are moving (back) to may, or may not charge you income tax on revenue received from another country. So you may be double-taxed... Once from the US and another from your country.