800,000 bht retirement visas

[exit2dos]

State tax is a problem. The only solution is to cut all ties and establish residence in a non-income tax state. There are a number of mail forwarding outfits based in Texas and Florida that can give you a non-post office box looking address to use. Helps if after you have established the address, you stop by and get a drivers license. You only have to do this once, since both states allow renew by mail.

Donâ??t ever renew a driverâ??s license in a income tax collecting state you are claiming non-residence in. They donâ??t buy it.

TH

 

State tax is a problem, but I wouldn't feel comfortable doing this method to avoid paying state income tax. For me, it is too much of a hassle.

 

I could understand why people would do that, potentially saving a lot of money. In some circumstances it would probably work very good, with not much of a penalty, if things got sticky.

 

You could save a few thousand dollars, people risk going to prison for that.

[cardinalblue]

I don't believe the advice is true about not having to pay taxes on dividends, pensions, interests, etc if you are a non-resident.

 

My accountant files for me every year and he has reminded me of the 35 day rule but for eligibility to file as a non-resident and to be eligible to qualify (the bigglie) as having a tax exemption on the first US 75K (the nuimber changed recently so not know exactly) of foreign income. One cannot contribute to their IRA account if they take the foreign tax exemption by the way....

 

It still matters between tax-exempt income instruments and taxable incomes like pensions. diveneds, interests and non-Roth IRAs..

 

If you make enough money as a non-resident to pay taxes, then you will still have to pay taxes on those taxable instruments. They are not exempt or else people would not continue to use non-exempt instruments like municipal bonds, etc even if they know they are going to be a long-term non resident like myself.....

 

CB

[cardinalblue]

sorry - substitute "tax" for "non" exempt in my last sentence...

 

CB

[cavanami]

It depends on the amount of income you have if you are out of the USA for 330 days to qualify for the $88K deduction (I think they boosted it to $88K).

Your income will include everything; pay, tips, per diem, dividends, interest, etc.

 

Add up your total income, deduct the $88K plus other deductions and pay tax on that amount.

 

Last tax year I had to remove my Roth 401K contribution, which was a bummer, as I paid some tax, so WTF! If I pay any tax, I should be able to contribute...

[ThaiHome]

There are 2 rules to qualify for the foreign income deduction. As you say, one is the 330 days, the other is bona fide resident which does not require any specific length of time out of US but does require you, among other things, to establish a â??tax homeâ? in another country.

You should also include in your US tax calc the dollar for dollar credit you get for any foreign income tax you paid.

2006 is going to be real bad since the tax bracket will be calculated on the entire income, not the amount after the deduction.

TH

 

[cardinalblue]

Are you sure about your addition? I thought the foreign tax exemption is just that..only for foreign income earned?

 

Tell me if this sounds right..if i make 50k in foreign income, this money is exempt as it is under the 88k allowance, but i can could pay taxes on any US unearned income like taxable interests, IRA distributions, and dividends. I don't think the foreign exemption is for US income generated at home?

 

I can see their point of not allowing an IRA contribution if one takes the foreign exemption. My tax accountant told me if you are making less than 20k in foreign income, it is better to pay taxes on that and contribute the max then to your IRA annually. If you are making anything over 20k in foreign income, better to take the tax exemption and and lose your right to annual IRA contribution...

 

He also warned me that the tax boards don't like one to switch back and forth annually between declaration of the exemption or waive it. He says its a red flag to them and one has a greater chance to get audited if they observe this..

 

CB

 

 

[tko_]

You are correct. Only your foreign earned income falls under the exemption. However, every year I did this my interest, dividends, etc paid in the US and remaining income above the exemption amount were always low enough to be below the lowest tax threshold, so I paid no tax.

 

The downside if your retired, as I understand it, is that your pension is not foreign earned income and is fully taxable by the US.